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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.

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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.

Source: https://e.nhipcaudautu.vn/economy/vietnams-economic-growth-to-slow-down-to-65-in-2023-fitch-3348637/

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Ho Chi Minh City Expects to Attract $7.4 Billion in FDI in 2023

Ho Chi Minh City, Vietnam is on its way to attracting $7.4 billion in foreign direct investment (FDI) capital this year, nearly double the amount attracted in 2022.

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According to a report by the Department of Planning and Investment of Ho Chi Minh City, in the first 20 days of 2023, the city recorded an FDI investment of over $179 million, a 74% increase compared to the same period in 2022.

So far, 50 foreign investment projects have been granted investment registration certificates with a total registered capital of $87 million, including 44 100% foreign capital investment projects and 6 joint ventures. 

Singapore leads the list of countries with the most investment projects in the city, with 12 projects worth $77 million accounting for over 88%. Taiwan and Hong Kong follow closely behind.

However, the city is facing challenges in attracting large-scale production projects due to limited land funds and high input costs. 

As a result, the city needs to focus on attracting supply chains to the region, such as head offices, R&D centers, logistics centers, and training centers.

In 2022, despite the impact of the Covid-19 pandemic, Ho Chi Minh City attracted $3.94 billion in FDI capital, a 5% increase from the previous year. 

FDI inflows have shifted towards science and technology, manufacturing, and processing industries, reducing investment capital for the real estate business. 

In 2022, FDI accounted for 13% of the total investment capital in the city, contributing $78 trillion to the budget revenue and $25 billion to import and export turnover, which accounted for 61% of the city’s import and export turnover.

Source: ZingNews

Source: https://e.nhipcaudautu.vn/economy/ho-chi-minh-city-expects-to-attract-74-billion-in-fdi-in-2023-3350490/

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Vietnam Real Estate Credit Soars to $109 Billion in 2022

Vietnam’s real estate sector saw a surge in credit in 2022, with outstanding loans reaching 2.58 million billion VND, equivalent to $109 billion, up 24.27% from the end of 2021.

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The State Bank of Vietnam hosted a Real Estate Credit Conference on February 8th, in Hanoi, where the news was announced.

This sector saw the fastest growth, accounting for 21.2% of total outstanding loans to the economy, the highest in the past five years.

Outstanding loans for real estate business increased by 11.5%, while consumer/self-use credit balance increased by 31.1%. Housing needs accounted for 62.19% of outstanding loans, while land use rights accounted for 20.66%.

The State Bank is committed to ensuring safe and effective growth in the real estate sector, controlling credit risk and promoting stability. 

It will continue to operate monetary policy firmly and flexibly, creating favorable conditions for the real estate sector to grow and develop. 

The legal framework on credit and banking activities will also be improved to increase access to credit for people and businesses, including the real estate sector.

Credit institutions will be directed to focus on feasible projects with good sales ability and to minimize operating costs and administrative procedures. 

The State Bank will control credit risk for the high-end real estate segment, which has excess supply, and control credit concentration to ensure operational safety of the bank.

Overall, the State Bank of Vietnam is dedicated to supporting the growth and stability of the real estate sector, contributing to macroeconomic stability and supporting economic growth.

Source: ZingNews

Source: https://e.nhipcaudautu.vn/real-estate/vietnam-real-estate-credit-soars-to-109-billion-in-2022-3350491/

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Vietnam Airlines to reopen more air routes to China

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Vietnam Airlines plans to resume five more routes connecting Vietnam and neighboring China in the next two months, taking the total number of its operating air routes between the two countries to nine out of the ten routes in the pre-pandemic period.

In particular, the national flag carrier will restore air services between Hanoi and Beijing in March with three flights per week.

It will also increase the frequency of flights from Hanoi and Ho Chi Minh City to Guangzhou and Shanghai to four from one or two flights per week.

In addition, four air routes between Da Nang and Guangzhou, Shanghai, and Chengdu, and between Hanoi and Chengdu are scheduled for resumption in April with two weekly flights on each route.

The airline plans to use wide-body A350 and B787 aircraft on some air routes to the northern neighbor starting in September this year.

Besides Vietnam Airlines, Vietjet Air is operating air services between Ho Chi Minh City and Shenzhen, Hangzhou, Shanghai, Sichuan, and Wuhan with six flights per week.

The budget air carrier reopened air services from Canh Ranh City under Khanh Hoa Province in south-central Vietnam to Changsha and Chengdu.

Vietjet will operate a total of 85 air routes this summer.

The reopening and increase of air routes to China are aimed at meeting travel and tourism demand between the two countries, which is forecast to recover.

A Vietnam Airlines representative said the number of passengers on air routes between Vietnam and China remains small but it is increasing.

In an optimistic scenario, China will continue easing procedures and the number of passengers on these air routes this year is expected to reach 80 percent of the figure in 2019.

After reopening its doors to international travelers in March last year, Vietnam’s domestic tourism has recovered strongly. However, its international tourism segment, which earlier accounted for 60 percent of the country’s tourism revenue, has yet to recover as expected.

Nevertheless, Vietnam has good reasons to hope for stronger recovery, especially after China reopened its doors on January 8.

Vietnam will see a recovery of the number of Chinese visitors by 50-80 percent in 2023 compared to the pre-pandemic volume, or three to 4.5 million Chinese tourists, HSBC experts forecast.

In 2019, Vietnam Airlines served 8.1 million passengers on Vietnam-China air routes, or 19 percent of the airline’s total passengers.

China was among the air carrier’s top three markets with the highest number of passengers.

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Vietnam Airlines plans to resume five more routes connecting Vietnam and neighboring China in the next two months, taking the total number of its operating air routes between the two countries to nine out of the ten routes in the pre-pandemic period.

In particular, the national flag carrier will restore air services between Hanoi and Beijing in March with three flights per week.

It will also increase the frequency of flights from Hanoi and Ho Chi Minh City to Guangzhou and Shanghai to four from one or two flights per week.

In addition, four air routes between Da Nang and Guangzhou, Shanghai, and Chengdu, and between Hanoi and Chengdu are scheduled for resumption in April with two weekly flights on each route.

The airline plans to use wide-body A350 and B787 aircraft on some air routes to the northern neighbor starting in September this year.

Besides Vietnam Airlines, Vietjet Air is operating air services between Ho Chi Minh City and Shenzhen, Hangzhou, Shanghai, Sichuan, and Wuhan with six flights per week.

The budget air carrier reopened air services from Canh Ranh City under Khanh Hoa Province in south-central Vietnam to Changsha and Chengdu.

Vietjet will operate a total of 85 air routes this summer.

The reopening and increase of air routes to China are aimed at meeting travel and tourism demand between the two countries, which is forecast to recover.

A Vietnam Airlines representative said the number of passengers on air routes between Vietnam and China remains small but it is increasing.

In an optimistic scenario, China will continue easing procedures and the number of passengers on these air routes this year is expected to reach 80 percent of the figure in 2019.

After reopening its doors to international travelers in March last year, Vietnam’s domestic tourism has recovered strongly. However, its international tourism segment, which earlier accounted for 60 percent of the country’s tourism revenue, has yet to recover as expected.

Nevertheless, Vietnam has good reasons to hope for stronger recovery, especially after China reopened its doors on January 8.

Vietnam will see a recovery of the number of Chinese visitors by 50-80 percent in 2023 compared to the pre-pandemic volume, or three to 4.5 million Chinese tourists, HSBC experts forecast.

In 2019, Vietnam Airlines served 8.1 million passengers on Vietnam-China air routes, or 19 percent of the airline’s total passengers.

China was among the air carrier’s top three markets with the highest number of passengers.

Like us on Facebook or  follow us on Twitter to get the latest news about Vietnam!

Source: https://tuoitrenews.vn/news/business/20230208/vietnam-airlines-to-reopen-more-air-routes-to-china/71400.html

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