Vietnamese economy records growth of 6.61% in second quarter
The nation’s economy enjoyed annual growth of 6.61% in the second quarter of the year, with the country’s economic growth for the remainder of the year projected to reach between 4.5% and 5.1%, according to industry insiders.
This information was released by experts during the launching workshop of Quarter II- Independent Assessment of Vietnam’s Macroeconomic Performance on July 21.
The event was co-hosted by the Vietnam Institute for Economic and Policy Research (VEPR) under VNU University of Economics and Business (UEB) and Konrad-Adenauer Stiftung (KAS) via online platform.
According to details provided by the quarterly report, growth in the agro-forestry-fishery, service, and industrial sectors recorded an increase in the first half of the year with the FDI sector playing a crucial role in economic growth through exports.
Furthermore, due to the impact of the COVID-19 pandemic, local businesses have been forced to bear additional production costs due to a rise in raw material prices coupled with land rental.
Inflation during the course of the second quarter and the first half also increased by 2.67% and 1.47% on-year, respectively, the lowest levels seen since 2016.
Despite this, inflation might increase in the near future due to a rise in food prices, education-related fees, and energy prices fluctuations.
Assoc. Prof. Dr. Pham The Anh has attributed the country’s high growth rate to the Government’s containment efforts taken to halt the spread of the pandemic, in addition to the reopening of EU countries.
Most notably, local businesses, especially foreign-invested (FDI) enterprises, have moved to take full advantage of the EU-Vietnam Free Trade Agreement (EVFTA) in order to restore production activities and boost exports to the EU market.
Moreover, other factors have also contributed to the growth, including the acceleration of disbursement and key public investment projects, a trend which sees trade and investment shifts to avoid risks from the trade conflict between the United States and China, along with disruption in global supply chains.
Stability of macro-economic environment, along with inflation being kept at a low level, has facilitated the implementation of support policies for economic growth.
However, the fourth wave of the COVID-19 pandemic striking in the middle and end of the second quarter of the year has severely disrupted the production process carried out by local businesses at several pandemic-hit localities nationwide.
Experts from VEPR emphasised the necessity of devising an overall and consistent strategy which can deal with various pandemic scenarios and cope with a shortage of medical equipment in the COVID-19 fight.
The Government and relevant ministries have therefore been recommended to urgently deploy and disburse support packages for unemployed workers, especially those in the non-official sector.
Fiscal policies should primarily focus on speeding up disbursement of large infrastructure investment projects at a national level, along with the implementation of adequate monetary policies in the near future, said economists.
Shares end lower at the end of choppy week
Shares settled down on the last trading day of the week as investors returned to profit-taking activities, while foreign investors continued to net sell on the market.
The VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) plummeted 24.84 points, or 1.92 per cent, to 1,268.83 points. The fall took back all recovery efforts of Thursday's trade which gained nearly 23 points.
The market’s breadth was negative as 282 stocks declining while 97 climbed and 38 ended flat.
Meanwhile, the liquidity was higher with nearly 582.3 million shares traded on the southern bourse, worth more than VNĐ19.3 trillion (US$839.4 million).
The index fell sharply due to a strong division of large-cap stocks in all sectors. The 30 biggest stocks tracker VN30-Index dropped 26.95 points, or 1.89 per cent, to 1,401.53 points. In the VN30 basket, 26 stocks decreased while only four rose.
The drop went against expectations from Saigon-Hanoi Securities JSC (SHS)’s analysts. In a daily report, the securities firm projected that the market would continue to recover with a target of around 1,300 points, which is an important resistance level as well as a psychological level.
Stocks in attractive sectors including banking, real estate and material still led the market’s downward trend. Of which, Vietcombank (VCB) lost the most in market capitalisation, down 3.29 per cent, followed by Vinhomes JSC (VHM), down 3.06 per cent.
Vingroup JSC (VIC), Hoà Phát Group (HPG), Techcombank (TCB), VPBank (VPB), Vietinbank (CTG) and Masan Group (MSN) also posted big losses, down at least 2 per cent.
Many other large-cap stocks fell more than 1 per cent like Vietnam Rubber Group (GVR), JSC Bank For Investment and Development of Vietnam (BID), PetroVietnam Gas JSC (PVGas, GAS) and Novaland.
However, there were still some stocks witnessing positive performance. Of which, Vinamilk was the biggest gainer, up 0.92 per cent. It was followed by Sacombank (STB), Đức Giang Chemicals Group JSC (DGC) and FPT Corporation (FPT) with DGC even hitting the maximum daily gain of 7 per cent.
On the Hà Nội Stock Exchange (HNX), the HNX-Index also posted a decrease of 1.37 per cent to 301.77 points.
Investors poured nearly VNĐ2.28 trillion into the northern bourse, equivalent to a trading volume of over 101.5 million shares.
Meanwhile, foreign investors continued to flee from the market with a net value of VNĐ172.46 billion. Of which, they net sold a value of VNĐ204.16 billion on HoSE, and net bought a value of VNĐ14.18 billion on HNX.
Businesses involved in HCM City price stability programme bear losses as prices rise
Supply of consumer goods in HCM City has been relatively steady, but the prices of some items have shot up and businesses taking part in the city’s price stabilisation programme are suffering big losses since they sell at fixed prices, according to the Department of Industry and Trade.
Speaking at a meeting with a special working group from the Ministry of Industry and Trade on Wednesday, a department official said though the amount of goods transported to the city is steady, the prices of some items are high. For instance, there is a short supply of eggs due to various reasons, and demand is high, he said.
Businesses that have signed up for the price stabilisation programme have to buy poultry eggs at VND31,000 for a tray of 10, but sell them at VND29,000, their registered price, he said. They need to get approval from relevant departments to raise retail prices.
He said the Ministries of Industry and Trade and Agriculture and Rural Development should help them buy at steady prices.
Pham Thi Huan, chairwoman of Ba Huan Joint Stock Company, said her company sells a million eggs in the city each day, half of them bought from other farms.
Egg prices have risen sharply after animal feed prices went up by 20-30 per cent since the beginning of the year and transport costs surged due to COVID-19.
But though farms have hiked their price to VND30,000 - 31,000 for a tray of eggs, her company has to buy them, according to Huan.
The company has stopped supplying eggs to bakeries and delivering to other provinces to focus on the city market.
Businesses in the price stabilisation programme have urged the city to adjust the prices of poultry eggs to reasonable levels, but with demand skyrocketing, it has refused to do so.
After inspecting traditional markets, Deputy Minister of Industry and Trade Do Thang Hai said the city should consider reopening them and its three wholesale markets soon.
Normally, the wholesale and traditional markets meet 70 per cent of the city’s food and grocery demand, with the other 30 per cent provided by modern retail systems such as supermarkets.
The closure of the markets put pressure on the latter, affecting not only the city but also neighbouring localities, Hai said.
According to the city Department of Industry and Trade, as of July 21 only 32 traditional markets remained open and 205 other were closed as part of efforts to contain COVID-19.
Bui Ta Hoang Vu, its director, said districts were actively developing plans to reopen traditional markets with protocols in place to ensure the safety of both sellers and buyers.
"But with the unpredictable situation in many districts, the reopening needs to be done carefully.”
Maintaining production chains crucial for Viet Nam
As exports formed a key component of local economic development, maintaining production chains was crucial for Viet Nam.
In the first six months of the year, exports increased by 29 per cent and orders were rising thanks to the recoveries of the US and China markets, as well as tax incentives from the EU due to the EVFTA agreement, said Nguyen Xuan Thanh, manager of the Fulbright Economics Teaching Programme.
Thanh took part in an online conference hosted by e-newspaper cafef.vn yesterday with other experts to discuss solutions for the economy in the ongoing fourth wave of the pandemic.
“The remarkable increase is due to the demand for Viet Nam's exports from major markets,” he said.
Thanh said Viet Nam was benefitting thanks to the continuing punitive tariffs on China from the Biden administration, whose economic stimulus packages increased the country's purchasing power, especially for goods such as office equipment, furniture, textiles and shoes.
He added though the EU market was still weak, the EVFTA has come into effect, helping Viet Nam's seafood, textile and footwear products to the EU to enjoy preferential treatment, helping increase exports to the EU.
Seeing the opportunities, especially in the context that big competitors like India and Indonesia were in a very complicated situation, Thanh said: “If we successfully control the pandemic in the third quarter, and business activities return to normal, it will be different immediately.”
He said the current growth driver was industrial production for export, so “it is important for workers in large industrial zones to remain safe.”
He added: “It is also necessary to ensure the production of essential goods for the domestic market, and to ensure that the supply chain is not interrupted.”
Do Quynh Chi, of the Research Centre for Employment Relations, told the conference that though there were lots of orders for seasonal goods such as fashion products like shoes and clothes, they required very strict delivery time or would incur penalties, adding that: “It is very difficult for many producers to complete orders to deliver to customers on time.”
Chi appreciated factories in Bac Giang and Bac Ninh for their positive control of the pandemic and said producers should negotiate with customers about reasonable times to complete orders.
Chi mentioned lessons from 2020 when Bangladesh, China and Viet Nam united to ask brands in the EU to share risks with manufacturers and requested them to accept delayed delivery during the pandemic.
“We should not only look at the impact of the pandemic in Viet Nam, but should expand internationally. Because Viet Nam is part of the global supply chain, we need to take a different look and give a common voice to brands. If we make an offer to share between brands and suppliers in Viet Nam, it will be a great support for them to recover from the pandemic,” she added.
Chairman of Thien Minh Group and Chairman of the National Tourism Advisory Board (TAB), Tran Trong Kien put his hopes on a vaccine solution, saying: “I am confident that thanks to the vaccine, we will open our doors.”
Kien said if Viet Nam took action as soon as possible and could vaccinate 70 per cent of the population as planned by year-end, the country could return to normal.
Kien said though the local economy was not that dependent on tourism like Thailand, where the sector contributes about 9.2 per cent to GDP, the industry still supported trade, investment and other activities.
Though many international and domestic research organisations have changed their forecasts for Viet Nam's economic growth in 2021, with worse results than the more optimistic forecast of 6.5 per cent, Thanh from Fulbright said: “The forecasted numbers at this time are not of much significance.”
He said: “The dual goal of maintaining economic activities and safety is more important,” adding: “Growth also depends on the pandemic – if we successfully control it in the third quarter, and business activities return to normal, it will be different immediately.”
Thanh forecast the most positive scenario in the last six months of the year was when the government could fulfil a vaccine commitment of about 150 million doses for local people with priority injections for industrial zones and tourist centres by year-end and reaching 70 per cent of the population vaccinated by mid-2022, Viet Nam could fight the pandemic and maintain production activities for export.
According to the General Department of Viet Nam Customs, in the first six months of 2021, the total export value of the country reached US$158.34 billion, an increase of $35.57 billion, or 29 per cent over the same period in 2020.
ASEAN Online Sale Day 2021 slated for August 8-10
Member countries of the Association of Southeast Asian Nations (ASEAN) are preparing for the ASEAN Online Sale Day 2021, which is slated for August 8-10.
This year's programme will be co-chaired by Brunei, which is Chair of ASEAN in 2021, Singapore and Vietnam.
It comprises two tiers for domestic and cross-border transactions.
According to the Vietnam E-commerce and Digital Economy Agency under the Ministry of Industry and Trade, consumers can shop online via the website http://onlineasean.com/ starting August 8.
In addition, firms can register to take part in the programme at: https://forms.gle/y97Jn2ajjgw3wUfF7.
As Chair of ASEAN last year, Vietnam initiated the organisation of the event on August 8 annually.
The ASEAN Online Sale Day is the first online shopping event that will be conducted collectively on a region-wide scale. Its first edition drew more than 200 businesses from ASEAN nations.
In the context of the COVID-19, e-commerce is being used as a useful buying method. The governments of the ASEAN nations are making efforts to create favourable conditions for businesses to go online during the COVID-19 pandemic.
The ASEAN Online Sale Day is expected to foster e-commerce and cross-border trade in the region, contributing to the implementation of the ASEAN Agreement on Electronic Commerce./.
Vietnamese dragon fruit gains favour in Australia
The Vietnam Trade Office in Australia is organising a Vietnamese dragon fruit week in large Australian cities from July 21 to August 10 to promote the export of the fruit.
Marking the recent arrival of 10 tonnes of Vietnamese dragon fruit in Australia, the promotion programme is based on community activities. It is set to encourage consumers to keep their receipts to participate in lucky draws; introduce the fruit at selling locations and on media and social networks; and set up booths to invite people to try dragon fruit within the framework of outdoor fairs in Sydney.
A representative of the office said amid new COVID-19 outbreaks, a number of big cities in Australia are applying high-level social distancing measures, causing difficulties for the promotion activities.
However, at a regular exchange of the office which took place virtually on July 22, some import companies and shopping malls in the country showed their interest in the fruit and unveiled that demand for importing it is high.
In 2020, the value Vietnamese dragon fruit exported to Australia hit a record of 4.18 million USD, up 36 percent on year. The export remained stable in the first half of 2021./.
CIMB Viet Nam approved to increase charter capital to US$160.1 million
The State Bank of Viet Nam on Thursday approved the chartered capital increase of the wholly foreign invested CIMB Viet Nam Bank from the current VND3.47 trillion (US$150.5 million) to VND3.69 trillion ($160.1 million).
Accordingly, the central bank promulgated Decision No 1241/QD-NHNN amending the charter capital of the bank’s licence.
In the past two years, CIMB Viet Nam has continuously increased its charter capital, showing its commitment to long-term development in the country.
Thomson Fam Siew Kat, CEO of CIMB Viet Nam, said: “CIMB considers Viet Nam as one of the most dynamic finance and banking markets in Asia and also one of our priorities. The charter capital increase would help us expand our investment, focusing on providing Vietnamese customers with modern finance and banking products as well as improving their experiences on high-quality products and services. CIMB has also signed partnership agreements with some strong partners in Viet Nam to complete our digital banking ecosystem.”
CIMB Viet Nam under CIMB Group – one of the biggest investment banks in Asia, now has more than 34,000 staff, providing services to over 16 million customers worldwide. CIMB Viet Nam, which officially received a licence in Viet Nam in 2016, has branches in two big cities of Ha Noi and HCM City. It has focused on the development of a modern and creative digital banking model.
Viet Nam expects to raise VND120 trillion worth of G-bonds in Q3
The State Treasury recently announced a plan to auction Government bonds worth VND120 trillion (US$5.21 billion) via the Ha Noi Stock Exchange in the third quarter of the year.
Specifically, five-year bonds will be worth VND10 trillion, seven-year ones VND8 trillion, 10-year bonds valued at VND40 trillion, 15-year bonds VND50 trillion, 20-year bonds VND5 trillion and 30-year bonds VND7 trillion.
The State Treasury could adjust the volume of issued bonds to suit market situation and meet the demand for State budget use.
In the first half of this year, it mobilised over VND141.4 trillion worth of Government bonds, or 40.4 per cent of the target assigned by the Ministry of Finance.
Support package aims to promote digital transformation of businesses
The programme to assist businesses in digital transformation for the 2021-2025 period of the Ministry of Planning and Investment and the USAID-funded Linkages for Small and Medium Enterprises (LinkSME) project have announced a support package to help enterprises promote digital transformation.
The support aims to help at least 100 businesses successfully conduct their digital transformation process by 2025.
Its objectives also include enhancing all businesses’ awareness of digital transformation, and the setting up of an expert network comprising 100 organisations and individuals providing consultancy and solutions to promote the process in enterprises and supporting them in developing digital platforms.
In the first phase spanning from August to December 2021, the programme will send independent and experienced experts to 15 enterprises to support them in building suitable strategies and roadmaps for digital transformation.
Eligible companies should have 50-500 employees and at least five-year operations in one of the prioritised sectors such as mechanical engineering, electronics, agriculture and agricultural product processing, wood processing, furniture production, garment and textiles, pharmaceuticals and packaging, and have their own orientations in digital transformation and restructuring.
Enterprises engaging in supply chains related to export activities and having female owners and managers will be also prioritised.
Do Hoang Hai, a digital transformation expert of the programme, said that it may take several years to conduct digital transformation in a company depending on its scale and level of readiness. Costs for the work may amount to hundreds of million of VND for a medium-sized enterprise, he added.
Hai advised businesses to design clear strategies and a detailed roadmaps in the work, while being prepared for difficulties and challenges during the process.
Benefited firms will receive support from the Ministry of Planning and Investment and USAID LinkSME in connecting with leading companies in domestic and foreign supply chains so that they will have chances to join the global supply chains./.
Vietnam’s strengths in foreign investment attraction: VietnamBriefing
VietnamBriefing, a business news website on doing business in Vietnam, recently published an article highlighting the country’s special factors in attracting foreign investors compared to other regional production sites.
Vietnam’s supply chains have significantly evolved from how they were a decade ago, the article said, noting that among the countries competing for investment, Vietnam has emerged as a highly effective alternative for relocation in Southeast Asia.
“Vietnam’s pursuit of foreign investment, competitive costs, free trade agreements, and liberal investment environment have made it an ideal location for investors seeking to reduce costs and diversify supply chains,” it said.
The writing also analysed Vietnam’s competitive edge in terms of labour costs, political climate, infrastructure, working environment and flexible administrative system.
It quoted Dustin Daugherty, Head of North American Desk for Dezan Shira & Associates, as saying that Vietnam enjoys a high degree of regional diversity, and the North, Center, and South all have particular competitive advantages for different industries and types of businesses.
The article reported that Vietnam spends up to 5.7 percent of its GDP to improve transport infrastructure and logistics. A total investment value of 120 billion USD has been planned for PPP projects in the road and power sectors.
Daugherty noted that Vietnam is still a rather unfamiliar market for new investors. Investors have to play the long game and look at Vietnam as a long term investment to be able to manage risks.
While Vietnam stands to be affected by the COVID-19 pandemic, its overall positive growth rate provides a partial buffer, the article concluded./.
Da Nang city strives to realise double goals
Since the beginning of this year, the central city of Da Nang has adopted synchronous, flexible and effective measures to realise the Government’s double goals of fighting the COVID-19 pandemic and restoring socio-economic development, on the back of strong engagement of the local political system, and active involvement of businesses and people.
Thanks to drastic anti-pandemic measures, the city has basically put the pandemic under control while maintaining production and trade.
Pham Truong Son, head of the management board of the Da Nang Hi-tech Parks and Industrial Zones Authority, said the local hi-tech parks and industrial zones have so far drawn 499 projects with a total registered capital of nearly 26.7 trillion VND and over 1.74 billion USD, and 65,000 workers.
The board has assisted firms in conducting administrative procedures, while monitoring the observance of pandemic prevention and control measures, and coming up with plans to develop production while effectively combating the pandemic, he said.
Da Nang has designated 2021 as "Year of restoring growth and promoting economic development”. Commenting on the performance so far, Chairman of the municipal People’s Committee Le Trung Chinh affirmed that the local economy is gradually recovering and escaping the 2020 negative growth, evidenced by the gross regional domestic product growth of nearly 5 percent in the first half of this year, up 1.05 percentage points from the same period in 2019. The services sector expanded by 5.34 percent, and the industrial and construction sector picked up 2.85 percent. Such results proved that the management of the local political system and efforts by departments, agencies, people and businesses have been effective.
One of the factors helping Da Nang to regain the growth trend is the control of the COVID-19 pandemic. The key to the city's success in curbing the spread of the coronavirus is fast tracing and isolation and large-scale testing. For example, when discovering 35 cases positive to SARS-CoV-2 at Truong Minh Company in the Da Nang IP on May 11, the city quickly traced and sent all F1 cases to concentrated quarantine facilities, while conducted testing for over 11,000 related people. When they tested negative, lock-down on the IP was lifted, allowing it to resume operation.
About socio-economic development measures in the last half of the year, Secretary of the municipal Party Committee Nguyen Van Quang said the committee will continue to involve the entire local political system in pandemic control work. Drastic and synchronous measures will continue to be taken, especially in residential and concentrated quarantine facilities. The city will urgently seek access to COVID-19 vaccines supplies in order to conduct large-scale vaccination.
At the same time, drastic measures will also be implemented to restore economic growth, speed up public investment capital disbursement, and remove difficulties for key projects, especially delayed ones, according to Quang.
During the fourth conference of the 22nd municipal Party Committee, delegates proposed key solutions for the last half of this year, including promptly providing assistance for residents and firms hit by the pandemic; dealing with “bottlenecks” in investment procedures, basic construction, site clearance, compensation; calling for investment in industrial clusters; and stepping up awareness campaigns to popularise Da Nang as a safe and attractive destination.
To gather socio-economic development pace post-pandemic, Son, the head of the management board of the Da Nang Hi-tech Parks and Industrial Zones Authority, suggested focusing on services for the domestic market, export-import, job creation, and social welfare.
He said the municipal People’s Committee needs to work with ministries and agencies to accelerate the investment in technical infrastructure for Hoa Cam , Hoa Nhon and Hoa Ninh IPs; and adjust investment attraction policy towards eco-friendly projects in new IPs.
The official also proposed holding activities to connect supply-demand in human resources between enterprises and training establishments in priority fields of hi-tech, information technology, automation, precision mechanical engineering; and increase foreign language and soft skill training for workers.
He said the city should issue mechanisms and policies to build a contingent of professional and dynamic cadres, strengthen discipline and order in administrative management, encourage dynamism and creativity among officials and cadres, and punish those showing bureaucratic behaviours./.
Experts say national economy needs to be resilient to shocks
Vietnam should adapt and stay resilient to economic shocks, as opposed to neglecting them, according to economic experts speaking during a recent workshop on forecasts for the national economy in the second half of the year.
Despite the big impact caused by the latest coronavirus outbreak, Vietnam's economy is projected to grow by approximately 6% this year.
The Central Institute for Economic Management (CIEM) recently revised two scenarios for the local economy by the end of the year following the latest resurgence of the SARS-CoV-2 virus in late April.
These changes mean that the national economy is forecast to grow by 5.9% and 6.2%, in the event that the recent COVID-19 outbreak is kept in check in October and August, respectively.
To maintain economic growth, CIEM researchers emphasised the parallelism between macroeconomic policy and micro-economic reform in economic recovery towards achieving a green and sustainable recovery.
Experts proposed that Vietnam devise strategies for enhancing the internal capacity and the degree of autonomy of the economy in the new context, coupled with the effective implementation of the international economic integration process, while improving the legal framework for innovation, with a specific focus on the digital economy.
Tran Thi Hong Minh, director of the CIEM, noted that the resurgence of the virus has given rise to a range of uncertainties relating to the possibility of economic recovery globally. Indeed, the rapid spread of new COVID-19 variants has prompted many countries to reinstate restrictive measures, whilst delays in vaccine delivery, debt risks, and inflation pressure continue to pose severe challenges.
Economist Nguyen Anh Duong, head of the CIEM research team, pointed to the fact that the business screening process will become stronger and fiercer, forcing many firms to leave the market. However, the number of enterprises which have raised capital and resumed operations is increasing, and foreign investors continue to place their trust in the Vietnamese market.
Moving into the new context, Duong underlined the necessity of enhancing the independence and autonomy of the economy, reducing dependence on exports from the foreign direct investment (FDI) sector, and improving the resilience of the local economy.
“It is necessary to withstand economic shocks, not avoid them,” Duong stressed.
The CIEM expert went on to emphasise the need to develop the private economy in association with the FDI sector. He suggested that businesses improve their capacity to effectively implement free trade agreements, with their focus not only be on the rules of origin, but also on new issues, such as e-commerce, the digital economy, innovation, science and technology development, and productivity.
One of the key solutions, according to Duong, is to ensure parallelism between macroeconomic policy and micro-reforms.
“Reforms must be implemented immediately and continuously, instead of waiting until the end of the pandemic,” said the expert, “The macroeconomic policy should be loosened flexibly to support businesses and keep room to help the economy bounce back later.”
Moscow entrepreneurs look for opportunities in Viet Nam
More than 100 Vietnamese companies took part in an online business matching event with entrepreneurs from Moscow on Tuesday.
The event was organised by Moscow Export Center with the support of the Ministry of Industry and Trade of the Russian Federation and trade mission of Russia in Viet Nam.
Businesses in Moscow are interested in penetrating the markets of Southeast Asian countries and are looking for opportunities to develop business relationships with Vietnamese partners.
During the event, 20 Moscow companies working in the fields of medicine, information technology, food, construction, machinery and equipment introduced their products to Vietnamese partners.
The Russian trade mission in Viet Nam noted positive growth in trade between the two countries.
The trade office identifies a number of promising industries for Russian exports to Viet Nam including timber products, pharmaceuticals, meat, dairy and fish products, grain, flour and other food products.
Russia ranked first in terms of exports of pork to Viet Nam in the first half of this year with 52,600 tonnes, worth $103.4 million.
The parties of the two countries agreed on the veterinary certificates for beef, chicken and offal, as well as pork, fish and dairy products.
In the near future, Viet Nam will approve a number of enterprises producing seafood from Russian far eastern regions.
The trade office will work closely with the authorised bodies of two countries in matters of certification of Russian companies exporting their products to Viet Nam.
Business matching participants will be able to hold business-to-business (B2B) meetings with manufacturers to discuss partnership opportunities from July 21 to 23.
Viet Nam exported nearly $1.4 billion to Russia and imported $845.6 million in the first five months of this year. Trade surplus reached $524.9 million.
Top Vietnamese items exported to Russia in the five months include phones and components; computers, electronic products and components; textile and garment; shoes; coffee and vegetable and fruit.
Two groups of Russian goods exported to Viet Nam worth over $100 million are coal of all kinds, reaching $202.6 million; and iron and steel of all kinds at $160.3 million.
Exports of ST25, ST24 rice surge
Exports of ST25 and ST24 rice, two Vietnamese rice varieties that were the top winners at global rice competitions, have achieved impressive growth.
Data of the General Department of Vietnam Customs showed that Vietnam exported nearly 3 million tons of rice worth US$1.64 billion in the first half of 2021, falling 14.8% in volume and 4.7% in value compared with the same period last year.
However, exports of ST25 and ST24 rice surged although these are two new varieties.
In the first five months of 2021, Vietnam exported 23,560 tons of ST24 rice and 2,570 tons of ST25 rice, soaring 800% and 1,470% year-on-year, respectively.
Some 90% of Vietnam’s ST24 rice was exported to China, while almost 100% of ST25 rice was shipped to the United States.
Nguyen Thanh Phong, director of Van Loi, a rice trading and exporting company, said that exports of the two premium rice varieties would continue to surge in the coming time if Vietnam maintains the quality of rice and has effective marketing strategies.
Phong expected that ST25 and ST24 rice will be exported to many other countries besides the U.S. and China.
The ST25 rice variety was crossbred in the Mekong Delta province of Soc Trang by a three-member team of two agriculture engineers---Ho Quang Cua and Nguyen Thi Thu Huong---and Dr. Tran Tan Phuong.
It was crowned the world’s best rice at the World’s Best Rice competition on November 12, 2019, the first time that Vietnam won the highest award at the contest, which is organized by The Rice Trader, a publication that provides in-depth analysis of the global rice industry.
Meanwhile, ST24 rice ranked second among the three most delicious rice varieties in the world at the ninth World Rice Conference in Macau from November 6 to 8, 2017.
However, it has been found that the ST25 rice trademark has been registered for protection at the United States Patent and Trademark Office by some foreign companies. Although investigations into the case have not been concluded, it showed that ST25 is the favorite rice of the U.S.
Binh Dinh calls for investment in coastal area of 3,000 hectares
The central province of Binh Dinh has started calling on potential enterprises, local and foreign alike, to invest in the area along the coastal De Gi - My Thanh road in My Thanh Commune, Phu My District, with a total area of about 2,986 hectares.
The move was made after the People’s Committee of Binh Dinh approved the 1/2000-scale zoning plan of the area last weekend.
Accordingly, this will become a multi-functional area with six zones.
Specifically, the first zone is the southern urban area complex covering some 356.9 hectares, promoting the Vinh Loi fishing village culture and developing tourism based on the De Gi lagoon. The second zone is the international marine tourism complex located in the south of My Thanh Commune covering 642.94 hectares, available for urban development, resort tourism, marine entertainment and eco-tourism.
With an area of 209.1ha, the third zone is the hi-tech agricultural park – fishery logistics industry – services complex, while the 519.95-hectare fourth zone is the urban area and tourism service complex located in the north of My Thanh Commune, including resettlement.
The remaining two zones are for developing an ecological residential area, agricultural production and an anchorage area for boats. There will be a center for researching the environment, natural resources and biodiversity in the De Gi lagoon area.
Reportedly, the De Gi - My Thanh section is part of a major coastal project carried out by the province.
At the meeting of the Binh Dinh People's Council on June 15, 2021, the investment policy of the coastal road project, namely Cat Tien - Diem Van, was approved with a total investment of nearly VND2,675 billion from the State budget.
At the same time, the province has completed the route from the Cat Tien Town to the new National Highway 19, contributing to the entire coastal route of Binh Dinh Province.
Previously, Binh Dinh decided to invest in the construction of the coastal road (DT639), from Cat Tien to De Gi. The total length of the route is 24.206km, with a total investment capital of over VND1,261 billion. The project implementation period is from 2019 to 2022.
All these projects will help Binh Dinh complete the coastal corridor, aimed at serving socio-economic development and tourism.
Lending interest rates unlikely to decline sharply
Many economic experts said that with the current credit scale of over VND10 quadrillion if banks reduce the lending interest rate by 0.5 percent per annum, enterprises will have tens of trillions Vietnamese dong more to overcome difficulties. However, these experts also said that they barely expected a deep and wide wave of interest rate cuts because banks are enterprises themselves, so they must consider carefully when they give loans.
About a week after the call of the State Bank of Vietnam (SBV), more than ten commercial banks have announced to lower lending interest rates from now until the end of the year. Commercial banks have introduced specific and public policies from the time of implementation to beneficiaries. The reduction of lending interest rates from 1 percent to more than 2 percent per annum, depending on the difficulty level of customers. Some commercial banks specified the total amount, the outstanding balance, and the number of customers that will enjoy interest-rate cuts this time. They even announced the total decrease in profits if they fully implement the interest rate cut.
Vietcombank's leader said that this was Vietcombank's largest interest rate cut in 2021, with a reduction of about VND1.8 trillion. However, Vietcombank will continue to launch many low-interest lending programs for new loans to help customers overcome difficulties from now until the end of the year. Agribank will spare about VND5.5 trillion to support existing customers from now until the end of the year. With this interest rate reduction, Agribank's income will decrease by nearly VND10 trillion in 2021.
Not only State-owned banks, private commercial banks, like VPBank, also said that it would support VND14 trillion of outstanding loans of both individual customers, small and medium-sized enterprises. VPBank’s profit is expected to decline by VND1.5 trillion in 2021. TPBank will reduce lending interest rates by 0.5-1.2 percent per annum from now until the end of the year for nearly VND45 trillion. HDbank will lower lending interest rates for more than 18,000 customers affected by the Covid-19 pandemic, with an interest rate cut of 1-2 percent per annum. This lender focuses on supporting customer groups producing essential products, such as healthcare and food, enterprises with a large number of workers, enterprises, and individuals directly affected by the Covid-19 pandemic.
Commercial banks agree to reduce lending interest rates from now until the end of the year, but the time to consider cutting and applying interest rates is different. Specifically, according to VPBank, small and medium-sized enterprises in the fields of tourism, hotels, education, restaurants, and passenger transport with existing loans will enjoy interest rate cuts from July 20 to the end of December 31, 2021. ACB considers adjusting interest rates for customers from July 15 to October 15. However, the interest rate reduction will depend on the extent of the impact of the pandemic on the business results of enterprises and the income of individual customers.
A leader of a private commercial bank in Ho Chi Minh City acknowledged that although there was still room to reduce lending interest rates, especially when the business results of commercial banks in the first six months of the year remained good, it was not easy to cut the lending interest rates sharply. The bank itself is also an enterprise, and the reduction of interest rates will affect its profit, so it must be agreed upon by shareholders.
Commercial banks also have to set aside financial resources to prevent the risk of increasing bad debt in the coming time. Reducing interest rates to share difficulties with enterprises at this time is necessary, but the banks themselves must give top priority to the safety of the banking system. Therefore, a wave of deep and wide reduction in lending interest rates is unlikely to happen, he said.
Currently, the lending interest rate has been at the lowest level ever. This situation not only occurred at four State-owned commercial banks but also at private commercial banks, with lending interest rates dropping by 3-4 percent compared to last year.
According to the Vietnam Small and Medium-sized Enterprises Association, lending interest rates have never been as low as they are now. However, this association also said that this interest rate level is still high compared to the endurance of enterprises in the context of interrupted liquidity and no revenue. For tourism and hotel enterprises, the decrease of 1-2 percent is not high enough due to the loss of cash flow to repay debt.
The leader of a branch of a State-owned commercial bank in HCMC said that during this time, the support provided according to the situation and the actual health of each enterprise would be more substantive than reducing interest rates equally. According to this leader, banks lending at higher interest rates than the market level should lower interest rates more sharply. Many businesses with large outstanding loans at the bank shared that reducing the interest rate by 1-2 percent per annum is not as necessary as increasing the credit limit to have more capital to cover expenses and business activities.
"We are currently revaluing collaterals, as well as the cash flow management of some enterprises, to consider increasing the credit limit according to the needs of businesses, instead of reducing interest rates for customers," he said.
The ability of enterprises to endure the fourth wave of Covid-19 is worse and worse because they have suffered the pandemic for too long. The bank's move to reduce lending interest rates is more meaningful because it helps to ease the cost burden and difficulties for enterprises. However, many people said that for enterprises to survive through the Covid-19 pandemic, authorities must have synchronous solutions, such as promoting vaccination for workers as soon as possible, exempting land rents, fees, and taxes for enterprises. Because only when enterprises operate stably again, will the economy actually recover.
According to Dr. Nguyen Tri Hieu, a finance-banking expert, credit support for enterprises is now an urgent issue because, without credit, enterprises are on the verge of bankruptcy. As for the interest rate, it must move according to the market. The lending interest rate depends on the deposit interest rate. If the deposit interest rate declines steeply, it will cause the cash flow to run out of the banking system. Therefore, authorities and the SBV need to have mechanisms and policies to create incentives for commercial banks to boldly lower lending interest rates through reducing the refinancing interest rates and the cash reserve ratio.
“The SBV needs to mobilize commercial banks to provide a credit package of VND300 trillion with low-interest rates of about 3-5 percent per annum to support small and medium-sized enterprises. Accordingly, each commercial bank only needs to deduct 3 percent of the total credit balance to participate in this support package," Mr. Hieu suggested.
Covid-19 containment in August key to ensuring GDP growth over 6%: VEPR
A GDP growth of up to 6.1% would be possible in case Vietnam is able to contain the Covid-19 pandemic right in August.
Pham The Anh, chief economist at the Vietnam Institute for Economic and Policy Research (VEPR) gave the prediction at the virtual launch of its quarterly macro-economic report today [July 21],
The economist, however, also revealed other two growth scenarios with economic growth rates varying from 3.5-4% in case Covid-19 restriction measures are in place until the fourth quarter, and 4.5-5.1% if the outbreak ends in the late third quarter.
Overall, Anh suggested Vietnam’s economic performance in the remaining months of the year would depend on the progress and scale of the vaccination program; the effectiveness and side effects of the Government’s measures against the pandemic; and supporting programs to boost growth.
“To aid recovery in short-term Vietnam should accelerate the funding disbursement progress of national projects, which would lay the foundation growth in the post-pandemic period,” he added.
Meanwhile, Anh mentioned the Government should consider adopting an accommodating monetary policy and keeping the expansion rate of money supply at 10%.
As the pandemic continues to cause hardship for businesses and workers, especially those in the informal sector, Anh stressed the necessity to ensure the effective implementation of the financial relief package.
Looking back at the country’s economic performance in the first six months of the year, Anh said the fact that the Government’s effective control of the pandemic by late first quarter helped growth to reach 6.61% in the second quarter, and 5.64% for the January-June period.
Anh, however, expressed concern over pending issues of the economy, including the high fiscal deficit, low disbursement rate of capital expenditure; growth dependence on the FDI sector; and slow progress in the privatization process of state-owned enterprises.
Economist Can Van Luc added the process of economic recovery in Vietnam remains uneven, with enterprises in fields such as transportation, logistics, tourism, and education struggling for survival.
“Vietnam should continue to stick with the twin goal, as overreacting against the pandemic would cause severe consequences to the economy,” Luc said.
In addition to the government’s recent US$1.1-billion package program, Luc called for specialized support for small and medium enterprises focusing on certain sectors and provinces/cities.
“Enterprises qualified for this program could get loans with interest rates of about 3-4% for a year,” Luc said, adding this would provide a much-needed boost for small enterprises at this difficult moment.
For the time being, Luc suggested Vietnam could look for new driving forces for growth, including searching for new markets for trade diversification, simplifying business conditions, and pushing for digitalization.
Korea Import Goods Fair 2021 offers platform for Vietnamese agricultural products
The Korea Import Goods Fair 2021 is scheduled to take place from July 22 to June 24 with the primary aim of seeking greater export opportunities for high-quality local agricultural products amid ongoing COVID-19 challenges.
During the course of the event, Vietnamese Ambassador to the RoK Nguyen Vu Tung visited a booth set up by the Vietnamese trade office in the RoK, while taking the opportunity to encourage local firms operating overseas to actively promote import activities. These should aim to increase the distribution of high-quality Vietnamese farm produce and processed food in the RoK.
This year's fair is set to feature roughly 200 booths, attracting the participation of businesses from approximately 40 countries and territories globally.
The event is expected to provide an ideal platform in which Vietnamese businesses can introduce their products, seek partners, and expand their business opportunities with foreign enterprises.
The RoK currently represents the country’s third largest trading partner after China, with total import-export turnover reaching US$66 billion last year.
Furthermore, the country’s agro-fishery exports and processed foods to the RoK last year reached US$1.2 billion, making up 4.1% of the RoK’s total import value of these products.
Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Dtinews/Hanoitimes
Over 1 million tonnes of goods channelled through Quang Ninh’s Mong Cai border gate