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Vietnam’s economic growth to slow down to 6.5% in 2023: Fitch

Vietnam’s economy is on course to rise 7.8% in 2022 before being expected to a sharp dip of 6.5% in 2023, according to latest report from Fitch.



Data released on September 29 showed that Vietnam’s real GDP growth accelerated sharply from 7.8% y-o-y in Q222 to 13.7% y-o-y in Q322. That marked the fastest pace of growth in more than a decade and brought year-to-date growth to 8.8% y-o-y. 

As of now this year, exports have been resilient, accommodating policy settings have been made, and Covid-19 limits have been eased. While the GDP is now expected to grow by 7.8% in 2022, a decline to 6.5% in 2023, according to Fitch. 

Given that favorable base effects are diminishing, domestic monetary tightening is already underway, and the outlook for global demand is continuously worsening, Vietnam’s quarter third 2022 real GDP increase of 13.7% year-on-year is probably the peak for growth.

On September 22, the State Bank of Vietnam increased its benchmark refinancing rate by 100 basis points (bps), bringing it to 5.00%. It is anticipated two more increases of 50 bps each before the end of 2022 and the beginning of 2023. The most recent boost immediately followed the US Federal Reserve’s (Fed) hawkish signals.

The SBV will continue to face pressure to tighten policy because the Fed is expected to raise interest rates to 4.50% by year’s end. This is done to maintain currency and financial stability. Rising inflation is probably going to encourage the central bank to keep raising interest rates.

Throughout much of 2022, inflation was relatively low, but it is now close to the SBV’s plan of 4.0% after most recently increasing from 2.9% year-over-year in August to 3.9% in September.

Over the upcoming months, inflation is probably going to increase, even more, reaching its peak only in a quarter second in 2023. According to predictions from Fitch, inflation will be on average 3.2% and 3.8% in 2022 and 2023, respectively.



Agro-forestry-aquatic product exports drop 11% in five months

Agro-forestry-aquatic product exports were estimated at 20.26 billion USD in the first five months of 2023, down 11.1% year on year, according to the Ministry of Agriculture and Rural Development (MARD).



Meanwhile, the country’s imports also dropped 8.7% to 13.15 billion USD, resulting in a five-month trade surplus of 3.55 billion USD, falling 21.1% from a year earlier.

In May alone, exports stood at 4.85 billion USD, down 3.5% from the same period last year, statistics showed.

The MARD said shipments to major markets such as China, Japan, and other Asian countries are gradually regaining growth. However, due to global economic uncertainties, high inflation in some developed countries, and tightened monetary policy in some big markets like the US and EU, businesses are seeing difficulties in seeking and fulfilling orders.

Of the five-month export revenue, farm produce brought home 10.3 billion USD, up 9.9%; animal products 190 million USD, up 34.5%; aquatic products 3.47 billion USD, down 25.9%; and forestry products 5.52 billion USD, down 26.8%.

Many products recorded higher export values than in the same period last year, including rice up 49%, fruits and vegetables up 39%, cashew nuts up 5.5%, meat and by-products up 59%, and coffee up 0.2%. Meanwhile, some products witnessed declines such as rubber down 24%, tea down 19%, peppercorn down 10%, cassava, and related products down 14.3%, tra fish down 40.7%, shrimp down 34.4%, and timber and wood products down 27.3%.

Vietnam posted growth only in exports to Asia, up 2.3%. In contrast, shipments to others decreased, including the Americas down 34.6%, Europe down 13.2%, Africa down 5.6%, and Oceania down 28%.

China, the US, and Japan remain the biggest markets of agro-forestry-aquatic products from Vietnam during the five months. Exports to China accounted for 20.4% of the total, rising 2.9% year on year; the US 19.8%, down 35.2%; and Japan 7.8%, down 1.2%, the MARD noted.

Source: Vietnamplus


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Thua Thien – Hue plans coastal urban area

Authorities in central Thua Thien – Hue province have decided to approve planning for the Vinh Thanh coastal urban area in Phu Vang district, covering over 1,500 ha.



The total population is estimated at 25,000 by 2030 and 37,000 by 2040.

It will be developed as an ecological model in connection with environmental protection, tourism development, and aquaculture.

A highlight is its location adjacent to the sea and Tam Giang Lagoon, and it will become a town in Phu Vang district.

The urban area will be divided into four key zones, focusing on the development of tourism, hotels, and entertainment; the promotion of handicrafts and green agriculture; the construction of modern infrastructure; and the development of fisheries and coastal ecological tourism.

It will give priority to investment in projects to complete technical infrastructure and land funds for resettlement.

Source: VnEconomy


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The story of the man who brought Vietnamese cocoa to the world

Mr. Tran Van Lieng left his high-ranking finance job to promote Vietnamese cocoa.



When the global economy was in crisis, Tran Van Lieng wished to return to farming as Director of Colonial Mutual Group of Australia’s Ho Chi Minh City branch.

Many were astonished by his choice.

The company he formed became one of the leading participants in the cocoa industry, accounting for more than 70% of the domestic market share in instant cocoa products (excluding Milo and Ovaltine’s barley). Saudi Arabia, Russia, USA, Philippines, China, Korea, and others import his company’s products.

Domestic brands on foreign shelves

Recently, foreign newspapers like New York Times, Bloomberg, and Nikkei praised the quality of some Vietnamese chocolate products and mentioned the story of chocolate brands Marou and Kimmy… but the reality is that the man who founded Vietnam Cocoa JSC is one of the first people to step into professional chocolate production and create a sustainable brand since 2007.

Starbucks, Lotte, Big C, Co.opmart, Satra, … sell his products.

Starbucks’ fate is a coincidence. While Vinacacao developed and expanded the market, Starbucks sought supplies and a trusted third party to promote it. However, negotiating for a Vietnamese company to sell to Starbucks and carry its own brand Vinacacao is challenging. The negotiation took both sides must negotiate.

“Starbucks went to Vinacacao’s factory, filmed the production process, checked the quality, and tasted samples. With Muslim Halal approval, its goods must be safe for the earth. They have their own standards for quality and need to have things like freezing point, color, and melting point changed to suit their tastes. They need clear details on the package and to be able to track it”, Lieng recalled.

Vinacacao had to constantly update product flavors to satisfy market tastes, especially young people, as well as product quality and packaging. the firm added two new bakery goods to Starbucks’ lineup of six classic ones.

The special story is that normally, chocolate will not have its own brand on the package, but Starbucks has accepted to put Vinacacao’s brand on chocolate bars sold at Starbucks stores.

After that, Vinacacao also cooperated with Lotte almost like it did with Starbucks. Currently, Vinacacao’s chocolate bars are on Lotte’s shelves. The two sides have cooperated since the beginning of 2017 and had the first order of 17,000 chocolate bars.

Vinacacao wants to sell Vietnamese cocoa throughout the world. In Korea, Vinacacao’s brand name and the distribution company’s logo. We’re negotiating to develop a Vietnam agriculture center. Lieng remarked, “If successful, this will be a focal point for Vietnamese businesses that want to display and introduce goods in the Korean market.” “In addition, we are still expanding exports to Arab countries, the Middle East,” he said. In Shanghai and Beijing, we’ve sold our products.”

Lieng hopes chocolate would perform like coffee. Because customers like Vietnamese coffee, foreign coffee cannot overtake it. If cocoa grows well and many farmers plant it, the market will produce enough to raise awareness. We’ll be supported then. We’ll sell Vietnamese cocoa’s provenance, like Korea did with ginseng, instead of our brand.

Vinacacao takes a detour to promote Vietnamese goods worldwide. Starbucks, Lotte. Lotte exports 2% of its income to Korea after signing a partnership deal. Vinacacao seeks that. Vinacacao offers chocolate and cocoa milk to Lotte so Vietnamese goods may reach Korea, Indonesia, Thailand, and other areas where they are unavailable. Thailand does not produce cocoa, although Vietnam, Malaysia, and Indonesia do. Thailand is a target market. “Then, Vinacacao’s products will go to Japan, China… through Lotte’s distribution system,” stated Mr. Lieng.

Enter the market niche

Mr. Lieng’s past knowledge and cultivation helped introduce Vietnamese chocolate to the worldwide market. Lieng was 36 when he started farming again. Foreign commerce was a state monopoly in 1989-1991. At the time, agencies and businesses needed foreign language speakers to draft contracts and deal with foreign organizations like the Food and Agriculture Organization of the United Nations (FAO) and the UNDP. Quoc… Mr. Lieng was easily chosen due to his strong English and foreign language major. Mr. Lieng studied overseas commerce to better comprehend exporting rice to the government.

“I went to India, Iran, Iraq, and Saudi Arabia on intergovernmental committees to assist Vietnamese farmers better use rice while working for the Ministry of Agriculture and Rural Development. This is a job and a chance to work with international partners,” said Lieng.

Mr. Lieng rapidly became the General Director of American Rice, a joint venture firm with the Ministry of Agriculture, after starting at the Ministry of Agriculture and Rural Development exporting rice. 5 years in food at 27.

After five years, American Rice has seen the rice export sector grow and more companies enter it. The State tightened quotas as rice prices rose. Because the joint venture was still foreign, American Rice had quota issues.

American Rice chose to leave Vietnam and invest elsewhere since its facility can produce 150,000 tons/year but only has a 30,000-ton limit. “At that time, I had to choose whether to follow them or stay in Vietnam, and I stayed because my daughter was only 9 months old,” Lieng recounts.

He later worked for Prudential and Colonial Mutual Group in Ho Chi Minh City. “In 2007 I thought about returning to the agricultural industry because the world economy was in crisis,” he stated.

The success of bringing Vietnamese cocoa to the international market is largely attributed to Lieng's experience and cultivation from his previous work. Photo: TL.
The success of bringing Vietnamese cocoa to the international market is largely attributed to Lieng’s experience and cultivation from his previous work. Photo: TL.

When returning to agriculture, Vietnam’s rice and coffee industries have flourished, but the cocoa business has virtually nothing. Mr. Lieng estimated that European and North American markets used 3-4 million tons of cocoa each year, but the soil and climate were unsuited for growing this tree.

Indonesia and Malaysia produce cocoa plants well. Young Malaysians don’t like farms, and Indonesia’s cocoa tree is genetically aging. That excellent weather made Vietnam a potential plant developer. He formed a corporation to collaborate with the government to show farmers that cocoa can be used to make high-value items like chocolate, cocoa powder, and instant cocoa drinks.

In 2008, the crisis demonstrated that service nations, like Vietnam, were badly hit. Lieng’s perspective was confirmed. less due to farming. While agricultural resources are accessible, Vietnam’s services are not competitive. Another influence is climate. Cocoa trees produced in tropical areas taste better than those in frigid Europe.

“As people get richer, people tend to favor the natural food of basic agriculture. Meanwhile, the agricultural processing industry has mutated products that are suspected of causing health effects. When learning about agriculture, I found that cocoa products help treat cardiovascular disease, and contribute to reducing stress, while the price is not too expensive, so the prospect is better. Fortunately, so far I have been able to do that,” Lieng said.

Mr. Lieng faced several decisions over his 16 years of business. The 2008 global financial crisis, which began in the US and expanded to numerous nations, drove bank interest rates in Vietnam to 17% or 21% when the firm was founded. Vietnamese banks had substantially higher interest rates than Korea, Malaysia, Singapore, Philippines, and others (the highest was 8%/year).

“We went through a dark period from 2008-2013, with many businesses struggling, even going bankrupt. To overcome, we had to meet with shareholders to increase capital, take savings and personal assets to pour into the business, and share capital with each other. Overcoming the shock of financial policy is the biggest challenge that thousands of businesses have to experience,” said the head of Vinacacao.

Vinacacao had two major challenges at 1-2 years old. Cocoa is a new sector, hence pricing and interest rates are not supported. Second, the fragile global economy lowers market buying power. 

Currently, in addition to domestic consumption, Vinacacao’s products are exported to many markets around the world and aimed at the middle class such as UAE, Middle East, Russia, Korea… with a wide range of products from cocoa powder, cocoa milk, chocolate… Vinacacao is prioritizing Asian markets because those are emerging markets, while the European market is almost saturated. In order to enter a large market like Europe, Vinacacao must promote products into niches, products with different flavors to diversify products for foreign consumers.

According to Lieng, the export market will quickly bring in more revenue and profit, in return, the domestic market needs to develop simultaneously such as marketing strategy, sales system… “With exports, In each market, we set up distribution centers to keep the brand,” he said.

Before the outbreak, Vinacacao exported 40% of production and consumed 60% domestically. After the epidemic, exports dropped to 30% and domestic consumption slowed. Vinacacao is using this opportunity to promote new product research and provide market-appropriate product lines. 


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