Vietnam’s inflation to moderate to 2.7% in 2019: HSBC

After recording its slowest pace in more than three year last month, Viet Nam’s inflation is forecast to hit only 2.7 per cent in 2019 after standing at 3.5 per cent last year.

Vietnam’s inflation to moderate to 2.7% in 2019: HSBC
Viet Nam’s headline inflation last month further moderated to 2.2 per cent year-on-year, from 2.9 per cent in May.

HSBC analysts made the forecast in the 'Viet Nam at a glance' report released this week.

Viet Nam’s headline inflation last month moderated to 2.2 per cent year-on-year, from 2.9 per cent in May. This marks not only the lowest year-on-year inflation growth since 2019, but the slowest pace in more than three years.

Prices fell 0.1 per cent month-on-month, reversing the incremental increases over the past two consecutive months. The main drag came from lower transport prices, falling 1.7 per cent month-on-month, primarily due to declining global oil prices.

Meanwhile, housing and construction materials prices fell 0.2 per cent month-on-month and food costs remained steady at 0.1 per cent. In addition, healthcare prices were unchanged over the past half a year.

Typically, the Government adjusts healthcare costs every six months, which means an upward adjustment to healthcare costs could happen in July or August. In addition, given how well inflation has been contained, there could be more room for the Government to continue healthcare reforms.

Overall, Viet Nam’s inflation has remained subdued with inflation growing at 2.6 per cent year-on-year on average in the first six-month period. Although higher global food prices stemming from El Nino and recent retail electricity price hikes could pose upside risks, they are unlikely to pose imminent threats to the State Bank of Viet Nam (SBV)’s inflation target of below 4 per cent.

Given benign inflationary pressures and solid economic growth, HSBC predicted the SBV will keep monetary policy on hold in 2019.

 

HSBC also noted during what has been a bumpy 2019, Viet Nam has managed to weather risks to grow relatively well.

At first glance, some headline numbers may not look rosy compared to previous quarters, HSBC said, citing Viet Nam’s GDP in the second quarter gradually slowed to 6.6 per cent year-on-year, due to slower growth in the manufacturing sector of 9.4 per cent, while manufacturing's contribution to GDP fell below 2 percentage points for the first time in two years, dragging down economic growth slightly.

However, they said, Viet Nam’s performance is not as bad as it looks in the broader context of a cooling tech cycle and subdued global demand.

Exports rebounded strongly to 9.5 per cent year-on-year from the 13-quarter low of 5.1 per cent in the first quarter.

The Purchasing Manufacturing Index (PMI) accelerated to 52.5 in June, ending the second quarter with a stronger reading than the first quarter.

But it’s not only manufacturing. Services, another pillar of growth, continued to expand steadily, at 6.9 per cent year-on-year in the second quarter, thanks in part to flourishing tourism.

Unsurprisingly tourism-related industries, such as retail sales, transportation and accommodation services, continued to grow steadily, contributing to a more diversified growth outlook. Viet Nam welcomed a record high 15 million tourists in 2018, and by mid-2019, tourist arrivals are growing 7.5 per cent year-on-year.

The trend is likely to continue in the second half of 2019, especially as the northern hemisphere enters winter season.— VNS

 
 

Other News

.
Banks struggle to raise capital amid Covid-19
Banks struggle to raise capital amid Covid-19
BUSINESSicon  07/08/2020 

In light of the unpredictable developments relating to the Covid-19 pandemic, many banks in Vietnam are attempting to raise capital but most of their plans have been delayed,

VN central bank cuts reserve interest rate to aid the economy
VN central bank cuts reserve interest rate to aid the economy
BUSINESSicon  07/08/2020 

The interest rate of compulsory reserves in the Vietnamese dong at banks will be 0.5 per cent per annum.

Record high gold prices see citizens keen to cash in
Record high gold prices see citizens keen to cash in
BUSINESSicon  07/08/2020 

Masses of people nationwide have been flocking to jewellery shops in order to sell the precious metal to cash in on the increasing trend of gold prices reaching an all-time high of VND62 million per tael.

Gold prices go up, VN central bank commits to stabilise market
Gold prices go up, VN central bank commits to stabilise market
BUSINESSicon  07/08/2020 

Prices of the yellow metal soared a new record reaching VND62million(US$2,681) per tatel or 1.2 ounce in Vietnam on Thursday after the State Bank of Viet Nam (SBV) confirmed to have solutions and sufficient resources to stabilise the market.

Ministry leaders discuss action plan to implement EVFTA
Ministry leaders discuss action plan to implement EVFTA
BUSINESSicon  07/08/2020 

Vietnamese enterprises have been urged to renovate their business strategies if they want to benefit from the EU-Viet Nam Free Trade Agreement (EVFTA), 

Top 10 most valuable brands worth US$8.1 billion
Top 10 most valuable brands worth US$8.1 billion
BUSINESSicon  07/08/2020 

The top 10 most valuable brands in Viet Nam 2020 are worth US$8.1 billion, increasing by 17 per cent from last year and accounting for 30 per cent of the list’s total value, according to Forbes Viet Nam magazine.

ASEAN’s investment contributes significantlly to Vietnam’s economic development
ASEAN’s investment contributes significantlly to Vietnam’s economic development
BUSINESSicon  07/08/2020 

Since Vietnam joined ASEAN (July 28, 1995) and committed to the implementation of the ASEAN Free Trade Agreement (AFTA) in 1996, ASEAN's direct investment has contributed significantly to Vietnam’s economic development .

Vietnam Airlines plans to sell nine planes due to financial woes
Vietnam Airlines plans to sell nine planes due to financial woes
BUSINESSicon  06/08/2020 

Vietnam Airlines is planning to sell nine A321CEO planes to optimize its fleet and improve its cash flow, as the national flag carrier’s revenue has dropped sharply due to the Covid-19 pandemic.

Vietnam – one of the best long-term growth stories in Asia
Vietnam – one of the best long-term growth stories in Asia
BUSINESSicon  07/08/2020 

Vietnam is one of the best long-term growth stories in Asia and is one of the most preferred frontier markets, according to HSBC.

Maximum $130,700 fine for listing violations: Draft decree
Maximum $130,700 fine for listing violations: Draft decree
BUSINESSicon  06/08/2020 

Public companies may receive a penalty of VND2-3 billion ($87,120-$130,700) for falsifying share listing and trading documents under a proposal from the Ministry of Finance.

Singaporean business surges ahead
Singaporean business surges ahead
BUSINESSicon  07/08/2020 

Singaporean business and investment in Vietnam has increased significantly over the decades, thus greatly contributing to strengthening economic bilateral ties.

Furthering developmental ties with dynamic Singapore
Furthering developmental ties with dynamic Singapore
BUSINESSicon  06/08/2020 

Vietnam and Singapore are witnessing their heyday in bilateral and multifaceted cooperation.

Wide impacts to be made with new law changes
Wide impacts to be made with new law changes
BUSINESSicon  06/08/2020 

Effective in 2021, the amended laws on Enterprises, Investment, and Public-Private Partnership are expected to entail breakthrough changes to Vietnam’s business and investment landscape in the coming time, 

Decisive actions to achieve goals
Decisive actions to achieve goals
BUSINESSicon  06/08/2020 

The Ministry of Planning and Investment is currently working on possible scenarios for the upcoming period amid the ongoing developments of the global health crisis.

Millenium to develop $15 billion LNG project in Khanh Hoa
Millenium to develop $15 billion LNG project in Khanh Hoa
BUSINESSicon  06/08/2020 

If the $15 billion LNG project of Millenium Group is approved, it will contribute to making the Nam Van Phong area the largest LNG centre in Southeast Asia.

Rebound likely despite bumpy roads
Rebound likely despite bumpy roads
BUSINESSicon  06/08/2020 

Despite a serious dip in local production caused by the health crisis, Vietnam is expected to be one of the fastest-growing nations worldwide this year, with the economy forecast to stay among the few nations with positive growth.

Unique advantages can pull Vietnam out of uncertainty
Unique advantages can pull Vietnam out of uncertainty
BUSINESSicon  06/08/2020 

In life, economic and health gains are not always equal. This is true for individuals and for countries. While Vietnam has managed to contain the pandemic so far, its economy has been hurt in recent months. 

Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
BUSINESSicon  06/08/2020 

The second wave of the COVID-19 epidemic to hit Vietnam has continued to deal a devastating blow to small businesses, travel agencies, and tourist accommodations in the Old Quarter of Hanoi due to the suspension of operations.

Container handling charge increases proposed to attract investment in seaports
Container handling charge increases proposed to attract investment in seaports
BUSINESSicon  06/08/2020 

Container loading and unloading service charges should be increased to approach the regional level so investors would not feel hesitant when pouring money into developing seaports.

Policies encourage automakers to assemble cars in Vietnam
Policies encourage automakers to assemble cars in Vietnam
BUSINESSicon  06/08/2020 

 Several automakers are considering assembling their best-selling models in Viet Nam due to the Government’s policy of zero import tariffs on components and a 50 per cent reduction in registration fees.

 
 
 
Leave your comment on an article

OR QUICK LOGIN