2023 is a successful year for Vietnam’s rice shipment as export volume and prices hit an all-time high of 8.3 million tonnes and 4.78 billion USD.

According to the Ministry of Agriculture and Rural Development, the total rice output in the country increased 1.9% to 43.5 million tonnes, meeting both domestic demand and export.

Export prices averaged 663 USD per tonne as a result of high demand.

The year was full of difficulties for rice export as geo-political conflicts in the world disrupted food and input material supply. The El Nino phenomenon, which posed a risk of contraction in food production, has triggered some countries’ concern over supply for domestic demand. The suspension of grain export by countries such as India, the UAE, and Russia also caused big supply pressure, thus mounting concern in the global food market.

However, as a leading exporter of farm produce, particularly rice, Vietnam still managed to guarantee national food security and export growth.


The quality of Vietnamese rice in the global market has also been further affirmed after the ST25 variety once again obtained the “World’s Best Rice” title recently.

Rice exporters said as global supply is still low, demand for Vietnamese rice will surge in 2024, especially from the Philippines and China.

HCM City to overcome challenges to achieve 7.5-8% growth in 2024

Challenges such as bureaucratic obstacles, land clearance issues and project implementation delays must be overcome for HCM City to reach its growth target of 7.5-8 per cent for 2024, said a city official.

Speaking at a meeting last Saturday, Phan Văn Mãi, chairman of the city People’s Committee, said that measures to achieve this growth target included speeding up public spending, enhancing public services, streamlining administrative reform, controlling inflation and stabilising the macro-economy.

The city would particularly focus on expediting public spending, boosting consumption and resolving the challenges faced by businesses in 2024, he said.

Over the years HCM City has seen rapid urbanisation and economic development, leading to increased demand for public services and infrastructure.

However, the city has faced challenges in effectively disbursing public funds, resulting in delays in crucial projects and hindered economic growth.

As of January 5, the city’s public investment disbursement reached nearly VNĐ44 trillion, only 64 per cent of the full-year target.

In addition to speeding up public spending, the city will focus on developing high-quality human resources and promoting digital transformation to foster digital governance, a digital economy, and a smart city.

It will continue to create the most favourable conditions for business activities, according to Mãi.

It will also review and adjust its general planning, including land use plans until 2040, as well as land prices, housing development plans, and the development and management of social housing until 2030.

Lê Thị Huỳnh Mai, director of the Department of Planning and Investment, said speeding up public spending would be a significant factor for the city to reach its growth target for 2024.

She recommended the city improve the capacity of department and branch leaders in capital disbursement, monitor progress regularly, accelerate site clearance, shorten investment procedure time, and be flexible in capital adjustment arrangements.

Dr. Trần Du Lịch, chairman of the Advisory Council implementing Resolution 98, said meeting the growth target of 7.5 - 8 per cent was challenging but attainable with effective measures.

He recommended the city make efforts to recover the real estate market and continue restructuring state-owned enterprises.

The city must focus on recovering the real estate market which is only frozen in the high-end segment, while there is a lack of more affordable products, according to Lịch.

To boost the city’s exports, Nguyễn Ngọc Hòa, chairman of the HCM City Business Association (HUBA), recommended instead of focusing solely on four large markets, HCM City should pay attention to other open markets like India, South America and Middle Eastern countries.

The city’s economy is expected to rebound in the second quarter and achieve 8 per cent growth in 2024, according to the HCM City Macroeconomic Report: 2023 Results and 2024 Forecast, which was released recently.

Earlier the city had set up an ambitious goal to achieve a growth rate of 7.5-8 per cent and attain 100 per cent of State budget revenue targets in 2024.

In 2023, the city’s growth was only 5.81 per cent, significantly down from over 9 per cent in 2022.

Total retail sales of goods and consumer services in 2023 increased by 10.8 per cent, and total tourism revenue increased by 22 per cent over 2022.

International visitors to the city increased by 44.3 per cent and the number of newly established businesses increased by 10 per cent.

The city’s economic recovery will continue to face challenges in 2024 caused by escalating global turmoil, experts have warned.

The real estate, stock and bond markets will continue facing obstacles this year despite a number of Government measures.

Some enterprises have been reporting a lack of export orders due to weak global demand. 

Developing supporting industries towards building a self-reliant industry

Việt Nam's supporting industry needs to advance self-reliance and reduce dependence on imports to improve the value and competitiveness of products in the global value chain.

Experts say that Việt Nam's industrialisation and modernisation strategy for the 2021-2030 period, with a vision to 2045, needs to adapt to rapidly changing domestic and international contexts.

A report by the Industry Department under the Ministry of Industry and Trade says that the underdeveloped supporting industry left Việt Nam unable to be self-sufficient in production inputs, leading to a significant dependence on imported spare parts and raw materials.

The trade deficit of inputs for production has been an issue for many years, reducing the added value of domestic industries.

The Industry Department report points out that in recent years, manufacturing and processing industries accounted for a high proportion of nearly 40 per cent of the total net production and business revenue of the economy, but only contributed about 14 per cent of the total GDP, a very low value added compared to other industries.

This weakness not only affects production development and economic growth in the short term, but will continue to affect industry and Việt Nam's economy overall in the long term in the context of deepening international integration.

"Therefore, developing supporting industries and gradually becoming self-reliant on domestic sources of raw materials and components is one of the core issues for sustainable development of Việt Nam's industry in the long term," said a representative of the Industry Department to Công Thương (Industry and Trade) online newspaper.

Highlighting the solution, the Industry Department said that first of all, it was necessary to improve the capacity of supporting industry enterprises; opening up market opportunities for supporting industry enterprises to become suppliers and participate in the supply chain of enterprises manufacturing and assembling final products.

The State also needed to actively expand foreign markets for supporting industry enterprises, along with receiving technical processes and production skills from abroad to improve production capacity, said the department.

In addition, it was necessary to speed up the construction of concentrated supporting industrial parks to create industry clusters; and develop material industries to enhance autonomy in input materials for production and reduce dependence on imported sources.

This would also raise the added value and competitiveness of Vietnamese products and businesses in the global value chain.

Trương Thị Chí Bình, general secretary of the Việt Nam Association for Supporting Industries (VASI), proposed that in the long term, the Government promulgate the Law on Supporting Industries and the Law on Key Industrial Development to affirm the importance of this type of industry, developing specialised policies to promote industrial development, welcome investment flows and shift production from other countries. 

Stronger solutions needed to boost domestic consumption demand

Việt Nam needs to apply stronger solutions to boost domestic consumption demand to drive economic growth this year.

Domestic consumption is one of three drivers for growth, besides investment and export, and is the only pillar which finished the target last year with total retail sales of goods and services rising by 9.6 per cent, according to the General Statistics Office’s report.

Public investment disbursement was estimated at 73.5 per cent of the plan while bottlenecks in the legal system, if not changed thoroughly, would continue to be a barrier in 2024.

Regarding trade, acceleration in the last months of 2023 could not help this pillar reach the finish line as import-export revenue fell by 6.6 per cent against 2022 to $683 billion, although the trade surplus was more than two times higher at $28 billion.

In the context of rising global uncertainties, aggregate demand was unlikely to recover to the level of the pre-pandemic period, so Việt Nam needs to take advantage of extensive and comprehensive cooperation to create momentum for 2024.

Lê Quốc Phương, former Deputy Director of the Việt Nam Industry and Trade Information Centre, said that the total retail sales of goods and services jumped quite high, by nearly 10 per cent, but the domestic aggregate demand was low. “The increase might be mainly from tourism and services, while consumption was not very positive,” Phương said.

Low consumption demand stemmed from the economic recession and a decrease in average income, forcing consumers to tighten spending.

A survey by PwC last year found that Vietnamese consumers had become more cautious with their spending habits. Specifically, 63 per cent of surveyed consumers tended to cut unnecessary spending due to concerns over rising prices, 54 per cent cut spending on luxury products and 13 per cent cut spending on grocery and food products.

According to Vũ Vinh Phú, an expert in trade, it is necessary to introduce appropriate policies to stimulate domestic purchasing power.

The Government’s policy of continuing reducing value added tax (VAT) by two percentage points to the end of June is a solution. However, the VAT reduction policy should be longer, together with bigger reductions for necessary products.

To stimulate domestic consumption, prices must be lower, Nguyễn Ngọc Hoà, President of HCM City Business Association said, adding that enterprises need support from the Government to implement demand stimulus activities.

Greater attention should be paid to developing the domestic market which plays a significant role in ensuring a firm foundation for the economy, economist Trần Đình Thiên said.

According to Lê Việt Nga, Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade, the domestic market is always a foundation for Vietnamese businesses in all situations. “The domestic market needs to be further promoted with effective and practical demand stimulation programmes,” she said.

New regulation on management of gold bar production issued

The State Bank of Việt Nam (SBV) has issued a new regulation on management of gold bar production to stabilise the gold market.

Under Decision 02/QĐ-NHNN, which has taken effect since January 2, 2024, the SBV’s Governor Nguyễn Thị Hồng authorised head of the SBV’s Internal Audit Department to establish a SBV supervision team to supervise the processing of SJC gold bars from raw gold.

The department must perform tasks according to the current legal regulations on supervising the processing of SJC gold bars from raw gold.

It is also responsible for developing and submitting to the Governor a regulation on supervising the processing of SJC gold bars from raw gold for approval.

After many days under strong fluctuation, domestic gold price has become more stable after the issuance of the SBV’s Decision 02/QĐ-NHNN.

At the Saigon Jewelry Company (SJC)’s shops, the price of gold bars was listed at VNĐ72-75 million per tael for buying and selling on Friday, remaining the same compared to the previous session. However, the gap between buying and selling prices is still kept at a high level of VNĐ3 million per tael.

The gap between domestic and world gold prices is currently narrowed to more than VNĐ13 million per tael.

Meanwhile, the price of 9999 gold rings on Friday increased by VNĐ50,000 per tael to VNĐ61.85 million per tael for buying and VNĐ63 million for selling.

At the end of last year, domestic gold prices saw strong adjustment with large amplitudes in a day by gold trading companies. The gap between each adjustment was from VNĐ1-2 million per tael.

​According to SBV’s deputy governor Đào Minh Tú, the State does not accept too large differences between domestic and global gold prices, and between SJC and other types of gold bars. All of the issues will be considered in the upcoming amendments to Decree 24/2012/NĐ-CP issued in 2012 on the management of gold business activities that the SBV will seek public comments in the coming time.

Regarding a proposal to abolish the monopoly on SJC gold bars according to the provisions of Decree 24, Tú said whether the SJC or many other gold brands exist, the ultimate goal would be to stabilise the gold bar market, and ensure the interests of the country's 100 million people.

Property market expected to stabilise this year

The domestic real estate market is believed to have reached the bottom and is expected to roar back to life this year thanks to a slew of measures taken by the Government, ministries, agencies and localities.

Speaking at a conference on Scenarios for Việt Nam Real Estate Market in 2024 held in Hà Nội on Friday, Nguyễn Văn Đính, chairman of Việt Nam Association of Realtors (VARS), said 2023 was a difficult year for the Vietnamese real estate market. The market saw a supply shortage as total supply for the whole year only reached 55,329 products. Although the figure posted a 14 per cent year-on-year increase, it equalled only 32 per cent compared to 2018, before the COVID-19 pandemic.

Very few new projects were approved, while thousands of unfinished projects were put on hold due to legal problems. A large number of projects were stalled due to lack of capital, which was the main cause of the problem, Đính said.

VARS statistics showed that currently only 46 projects had been completed with 20,210 apartments, reaching 4.7 per cent of the set plan in the period 2021-25.

Đính said that the investment demand was clearly affected when customers and investors gradually lost confidence in the real estate market. Although there were signs of improvement following the market's recovery, it had not yet regained its previous performance. In particular, the supply-demand imbalance was becoming more serious, along with the trend of tightening spending, causing demand to decline, requiring a plan to resolve this situation soon.

According to the VARS research team, the transaction volume still depended heavily on the quantity of supply. Total transactions in the four quarters of 2023 were: 2,700; 3,700; 5,778; 5,710 products and the absorption rate has gradually increased over the quarters. Total transactions for the whole year 2023 reached 18,600 products, equivalent to those in 2022, but only 17 per cent compared to 2018. The improvement in absorption rate was thanks to three main factors, mainly customers/investors were less pessimistic, and investors were more active in price reductions and applying a series of preferential policies. In addition, some projects were eligible to reopen, increasing choices for customers.

However, the housing prices have still been relatively high compared to both the real value and financial capacity of people, especially in two big cities with the average apartment price in Hà Nội of VNĐ51.7 million (US$2,120) a sq.m and VNĐ71 million ($2,912) in HCM City. For the land segment, high-value villas or townhouses, investors accepted a loss of 30 – 40 per cent compared to the fever peak. However, this condition has been basically controlled and stabilised over time. In localities with clear signs of recovery, selling prices in these segments have plateaued, and in some places even increased slightly by 3-5 per cent.

Hoàng Hải, the director of the Department of Housing and Real Estate Market Management under the Ministry of Construction, stated that since the beginning of 2023, the Government had taken decisive action and relevant ministries had promptly participated in resolving "bottlenecks" in land procedures, credit and bonds.

Alongside the prompt issuance of policies, significant progress had been made in the legal framework with the adoption of two important laws that greatly impact the market: the amended Housing Law and the amended Real Estate Business Law. Notably, the Government's working group had reviewed, encouraged and promptly addressed challenges faced by numerous real estate projects in various localities. However, implementation at the local level remained limited despite having some changes, Hải added.

The Government and Prime Minister Phạm Minh Chính had issued various documents and organised many conferences to get opinions from businesses, people and experts on ways to remove difficulties for the market.

Notably, the Government’s Resolutions 33/NQ-CP and No 97/NQ-CP had identified solutions, one of which is that real estate firms should prioritise paying debts and consider restructuring prices and products based on the real demand, said Lê Hoàng Châu, Chairman of the HCM City Real Estate Association.

Another was Decree 08/2023/NĐ-CP which removed problems in the individual and corporate bond markets, he added.

At the same time, the central bank has focused on perfecting the legal framework, streamlining procedures, and increasing preferential credit packages to make it easier for people and enterprises to access bank loans, according to SBV Standing Deputy Governor Đào Minh Tú. 

Đính expects 2024 to mark the final stage of overcoming obstacles in the Vietnamese real estate market. The market will gradually achieve stability, potentially leading to a more positive outlook. This change represents a shift towards the starting line rather than actual development, as the market moves away from its previous negative state. Nevertheless, this progress serves as a solid foundation for the market to prepare for a new cycle of development that is characterised by stability, sustainability and effectiveness.

Through the purification process, the internal health and ability to adapt to difficulties and challenges of entities existing in the market will be improved, according to Đính. Although the changes in the new law have not yet been applied, they will be a positive signal for subjects to place their trust and morale in preparation for the upcoming period. Along with solutions to remove legal difficulties and capital sources for the real estate market, the "trust" of customers and investors will continue to be a factor of concern and focus to relieve the problem in 2024.

VARS forecast that in the first and second quarters of 2024, the market would continue to maintain good signals from the end of 2023. But it would be from the end of the third quarter onwards that the recovery will be clearly shown.

Experts, however, pointed to outstanding challenges in terms of institutions, credit loans, bonds and the implementation of mechanisms and policies in localities.

Nguyễn Quốc Hiệp, Chairman of GP Invest, said there were almost no new projects at present owing to legal problems, which was also the main cause behind the supply-demand mismatch.

Given this, he suggested localities actively engage in reforming administrative procedures and untangling knots for ongoing ones. He also pinned hope on a new Land Law, saying that it would decide the recovery of the property market.

Economist Cấn Văn Lực held that the rebound would be seen more clearly from the second quarter of this year when the Government’s incentives begin to work, financial cases are settled, and the corporate bond market sails through the rough time. 

Vietnam sees many opportunities to promote fruit, vegetable exports to China

Việt Nam has more opportunities to boost fruit and vegetable exports to China this year due to signing more protocols to permit official exports of fruits and vegetables to this neighbouring market.

At the end of 2023, Việt Nam and China signed a protocol on plant quarantine requirements for fresh watermelons exported from Việt Nam to China.

Đặng Phúc Nguyên, general secretary of the Việt Nam Fruit and Vegetable Association, said this protocol would be an important step to open up more opportunities for businesses and farmers growing watermelon in Việt Nam.

This protocol is expected to help Việt Nam's watermelon exports double next year. Accordingly, inspection of this fruit at the border gates will be much faster. China customs will reduce the frequency of inspection to only 2-3 per cent of the export batches, so there will no longer be watermelon congestion during the peak season like during the Tết holiday. Besides that, the export price of this fruit will also be more stable.

In the first 10 months of 2023, Việt Nam's watermelon export turnover to China reached US$44 million, an increase of 162 per cent over the same period last year. It is forecast that watermelon exports to this market could reach more than $50 million in 2024, said Nguyên.

One year ago, Việt Nam and China also signed a protocol on the export of fresh bananas from Việt Nam to China. According to the Import-Export Department, that protocol has created significant increase in Vietnamese bananas exported to China.

In the first 10 months of 2023, Việt Nam was the second largest supplier of bananas to China. China Customs Authority's statistics showed that during the first 10 months, Vietnamese bananas imported into China reached 412,000 tonnes, an increase of 2.3 per cent over the same period in 2022.

Meanwhile, according to Việt Nam's General Department of Customs, in the first 11 months of 2023, Việt Nam's total fruit and vegetable exports reached $5.19 billion, up 70.3 per cent over the same period last year.

China was still the largest market for Việt Nam's fruit and vegetable exports in the first 11 months of 2023 with a value of $3.4 billion, an increase of 149 per cent over the same period last year.

In terms of products, in 2023, durian surpassed dragon fruit to become the product with the highest export value of $2.2 billion, five times higher than that of 2022.

Among the top durian exporters, Chánh Thu Fruit Import-Export Ltd, Co also had a successful year with the Chinese market.

Ngô Tường Vy, general director of Chánh Thu, said durian was the company's main export product in 2023, contributing to doubling revenue from 2022.

Meanwhile, Nguyễn Đình Tùng, the general director of Vina T&T Group Import-Export Company, said that in 2023, Chinese partners ordered 1,500 containers of durian, but the company could only meet 30 per cent of the order due to lack of supply.

In the first 10 months of 2023, Vina T&T's fruit exports to China increased by 70 per cent over the same period, accounting for 35 per cent of revenue and far surpassing fruit exports to the US and Japanese markets, Tùng said.

Now, Vina T&T has a plan to expand its market share in China, according to Tùng. With huge demand from the market of 1.4 billion people, Việt Nam's durian industry is believed to still have a lot of potential in exporting this fruit. The market share of Vietnamese durian in China could be at 40 per cent in the next five years.

Việt Nam has 14 agricultural products with permission to export to China, including bird's nests and products from bird's nests, sweet potatoes, dragon fruit, longan, rambutan, mango, jackfruit, watermelon, banana, mangosteen, black jelly, lychee, passion fruit and durian.

Currently, the Ministry of Agriculture and Rural Development is coordinating with the General Administration of Customs of China (GACC) to complete documents for six kinds of citrus fruit, coconut, frozen durian, chilli, medicinal herbs and wild-caught seafood.

However, the challenge for domestic businesses and farmers is to comply with growing areas, packaging facilities, food hygiene and safety, plant quarantine, and all technical requirements.

Ngô Xuân Nam, Deputy Director of the Việt Nam Sanitary and Phytosanitary Notification Authority and Enquiry Point (Việt Nam SPS), said that only organisations with systematic production models could export to many countries, not only to China.

To maintain export markets for Vietnamese fruits, the Ministry of Agriculture and Rural Development has promoted monitoring coded growing areas and packaging facilities to meet plant quarantine and food safety requirements specified in the protocols.

Positive signals lift the stock market

The VN-Index reported a positive start to 2024, with six consecutive sessions of gains. The return of banking stocks leading the market’s trend and a surge in liquidity signal significant capital entering the stock market.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,154.68 points, while the HNX-Index was last traded at 232.76 points. 

For the week, the former rose 2.19 per cent and the latter was up 0.74 per cent. 

On HoSE, the average trading value reached VNĐ17.8 trillion (US$730.3 million), an increase of 15.83 per cent from the previous week. The trading volume on the bourse also increased by 27.03 per cent to 796.95 million shares.

Vietnam Construction Securities JSC (CSI) said that the first trading week of the new year witnessed bullish developments in the Vietnamese stock market, with all four sessions ending higher. 

In particular, there was a surprising return of capital to the banking stocks, which are the largest capitalised group in the market, helping the liquidity on the HoSE exchange reach $1 billion on January 4.

According to CSI, with the prospect of further decreases in savings interest rates, liquidity decisively poured into the stock market during the first trading week of the new year.

The securities added that the global stock market had a rather cautious trading week following the December meeting of the US Federal Reserve.  The cautious sentiment may have influenced the buying and selling activities of foreign investors in the Vietnamese stock market. Foreign investors net sold nearly VNĐ1.2 trillion.

The developments of the first trading week of 2024 are reinforcing the established upward trend from the end of 2023, said experts from CSI. 

It expects the VN-Index to target the resistance level of 1,200 points in the coming weeks but does not rule out the possibility of fluctuations in the range of 1,165-1,175 points.

Meanwhile, Saigon - Hanoi Securities JSC (SHS) noted that although the domestic macroeconomic situation appeared stable, with gradual GDP growth, it had not met expectations. Weak credit growth suggested a low capacity for capital absorption in the economy, and challenges persisted in the real estate and bond markets.

Globally, the economic landscape remained uncertain, with low growth and some EU countries, such as Germany and the Netherlands, experiencing recession. On the positive side, inflation had stabilised, and the Fed had hinted at pausing interest rate hikes and potentially initiating rate cuts in 2024.

Given the mix of positive and negative events, SHS believed it was appropriate for the market to seek balance and accumulate. The macroeconomic conditions call for caution and careful navigation in the coming weeks, the securities firm added. 

Việt Dragon Securities Corporation (VDSC) said that the last session of the week reflected a hesitant and exploratory state, with decreased liquidity compared to the previous session.

The market's weakening signals were not clear, but there remained the possibility of significant selling pressure around the 1,160 point-level. It was expected that the market would continue to fluctuate within the 1,145-1,160 points range before more specific signals emerge.

Similarly, Mirae Asset Securities (Vietnam) said that the VN-Index's upward trend was currently holding a significant advantage after rising for six straight sessions.

During the previous week, the index experienced signs of pause around the 1,160 point-level, accompanied by strong profit-taking in the banking sector following a rapid surge. 

As a result, there might be some see-saw movements in the upcoming sessions, with investors keeping a close eye on two key levels of 1,150 points and 1,160 points.

Domestic market promotion - important growth driver in 2024

With a population of more than 100 million people, of which the middle class is considered to stand at a high level of 20%, Vietnam truly boasts potential and strengths for goods consumption and service development.      

Looking back at the results of 2023, vibrant commercial and consumer service activities duly contributed to fulfilling the whole year's production and business plan, with total retail sales of goods and consumer service revenue soaring by 9.6% compared to the previous year.

Data compiled by the World Bank indicates that Vietnamese per capita income growth during the 2017 to 2022 period hit 8.5%, marking the highest in Southeast Asia and nearly double the global average growth rate.

The number of middle-class people and the proportion of urban residents has also increased rapidly in recent years, with rapid income growth causing the value of Vietnamese people's consumer goods basket to go up swiftly.

​In 2023, the scale of the nation’s retail market exceeded US$180 billion and is expected to continue to grow over the following years. At the same time, the nine-month 2023 report of the market research organization Euromonitor showed that brand and product quality remain one of the key factors in the purchasing decisions made by Vietnamese people. Indeed, more than 26% of Vietnamese consumers regularly buy products from famous brands, whilst over 35% are willing to purchase less but will choose higher-quality products.

These factors have made the country a "potential" land for retailers, whilst also being an opportunity for businesses to build brands and expand domestic distribution channels for global quality Vietnamese goods, local goods with national quality and national brands, and key products of localities.

However, as a means of mastering their own playground, thereby promoting sustainable production and consumption of Vietnamese goods, local businesses need to constantly strive to innovate, explore, and promptly grasp new consumer trends of Vietnamese people, from which effective plans and strategies can therefore be devised.

Mai Thi Thuy, chairwoman of the Women's Association of Small and Medium Enterprises in Hanoi, said, "Enterprises themselves must innovate, they cannot follow the traditional, old ways of the past. In addition, the latest knowledge must be brought into business management, while simultaneously, local businesses need to improve knowledge, invest, and quickly access technology. They also need to quickly grasp commodity market information and the State’s business support policies. That's the way to survive and thrive.”

According to statistics, domestic consumption spending accounts for about 60% to 65% of GDP, of which household spending is roughly 50% to 55% of GDP. With a population of 100 million people, including 20 million middle-class people, it will create huge demand and it is forecast that by 2026, about four million more people will join the middle class.

Today's new consumer trends therefore require businesses to produce according to market needs, not just products which hold advantages.

Although Vietnamese goods’ position has been increasingly secured over recent times, they still face plenty of difficulties and challenges ahead. Many imported products tend to shift strongly to consumption in the domestic market following the enforcement of new generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA).

According to Nguyen Anh Duc, chairman of the Vietnam Retailers Association, support policies for businesses need to be more fundamental in order to create a stable and long-term stimulus effect, in which emphasis should be placed on promoting direct support policies for local firms.

He also emphasized ensuring the effective operation of cashless payments whilst developing logistics services and the computing industry in order to help consumers shop conveniently.

Furthermore, according to experts, it remains necessary to improve the effectiveness of consumption stimulation policies and diversify sales channels by paying greater attention to online shopping channels.

This trend will help enterprises to save business costs, secure market shares, and gradually increase revenue, they added.

Vietnam's business confidence gains traction in Q4 amid challenges: EuroCham

Confidence among European firms operating in the Vietnamese market is showing signs of resilience amid the latest Business Confidence Index (BCI) by the European Chamber of Commerce in Vietnam (EuroCham) conducted by Decision Lab reaching 46.3 percentage points in the fourth quarter of 2023.

While this rise signals gradual stabilisation, it's vital to highlight that the BCI has remained below the midpoint since Q4 of 2022.

As Vietnam’s business landscape has transitioned from Q3 to Q4 2023, subtle yet telling shifts in sentiment have emerged. While there was a slight two percentage point dip in overall optimism for economic stability and growth, this was more than offset by a drop of 14 percentage points in expectations of an economic downturn. 

The last quarter of 2023 witnessed a marked increase in terms of satisfaction among businesses, with firms confident in their current situation rising from 24% in Q3 to 32% in Q4. The outlook for Q1 of 2024 is also positive, with 29% of enterprises viewing their prospects as 'excellent' or 'good', with this being a sign of diminishing concerns, particularly as extreme worries fell from 9% to 5%.

Looking ahead, Vietnam's business sector is poised for growth as 31% of companies plan to expand their workforce in Q1 of 2024, whilst 34% intend to increase their investments, representing a clear uptick from 2023. These statistics therefore signal a strong momentum for growth and opportunity as the nation starts the new year.

According to the report, the country has emerged as rising star in global investment. In Q4 of 2023, the country’s status as an investment hotspot increased significantly. An impressive 62% of those surveyed ranked the nation among their top 10 global investment destinations, with 17% placing it at the very top. This strong endorsement is therefore matched by 53% of respondents anticipating increased foreign direct investment in the country by the end of Q4.

The survey also highlights its strategic position within the ASEAN region. While only a small fraction at 2% consider it to be an 'industry leader', a noteworthy 29% rank it among the 'top competitive countries' in the bloc. The majority at 45% view the nation as a competitor, albeit acknowledging certain challenges, with this perspective emphasizing the country’s growing influence and potential for further advancement within the ASEAN economic landscape.

The reports goes on to outline that 40% of respondents view the local workforce as moderately proficient, indicating a blend of basic and intermediate skills.

Furthermore, 50% rate the workforce's availability as moderate which reflects the challenges in finding qualified candidates. These results thereby suggest that further development and training could further enhance workforce proficiency and availability in a bid to better meet the demands of the global market.

Most notably, 54% of respondents call for 'administrative and bureaucratic streamlining', indicating that the easing of bureaucratic processes could significantly enhance the local business environment. Additionally, 45% stress the importance of 'strengthening the legal system and regulatory environment'; while 30% see 'infrastructure development, including roads, ports, and bridges’ as essential for FDI attraction.

With regard to the EU-Vietnam Free Trade Agreement (EVFTA), by Q4 a significant 27% of companies reported experiencing 'moderate' to 'significant' benefits from the agreement, a marked increase from just 18% in Q2. The foremost advantages of EVFTA include 'tariff reductions or eliminations' at 42%, 'increased market access to Vietnam' at 27%, and 'improved competitiveness in Vietnam' at 25%, indicating substantial economic impacts.

However, the survey also reveals challenges faced in fully leveraging the EVFTA's potential. About 13% of respondents cited 'Uncertainty or lack of understanding of the agreement' as a primary obstacle, suggesting a need for more clarity and education around the agreement's provisions.

Moreover, 9% pointed to 'Opaque and lengthy customs clearance procedures' as a hindrance, highlighting inefficiencies which could ultimately dampen the benefits of the trade agreement.

Gabor Fluit, chairman of EuroCham, said, “Confidence among the foreign business community in Vietnam is clearly on the rise. New data for 2023 support this. Last year, foreign direct investment reached US$36.61 billion, jumping 32.1% from 2022. This is a clear illustration of growing faith in Vietnam's economy.”

“Tourism also rebounded strongly. By welcoming over 12.6 million visitors in 2023, Vietnam has more than tripled international tourist numbers from the year before. This global spotlight on Vietnam as a top destination for business travelers and tourists also signals broader economic recovery,” Fluit noted.

“While these figures are indeed promising, it's crucial to maintain a cautious outlook. It's noteworthy that the BCI still remains below the midpoint, and more than one-third of businesses still expect to underperform,” he added.

“Given the intense economic competition in the region, Vietnam should stay vigilant. It's crucial for the country to keep refining its policies and strategies to draw and maintain European foreign direct investment. One vital area to focus on is simplifying administrative procedures, a well-known obstacle for businesses. At the same time, investments in infrastructure to reduce logistics costs and upgrading the skills of the workforce are equally essential. This will help Vietnam stay competitive and maintain its growth trajectory,” he assessed.

He also underscored the importance of leveraging the EVFTA and the nation’s various bilateral and regional trade pacts, which are expected to play a key role in transforming the current economic recovery into long-term and balanced growth.

HCM City to build three major projects

HCM City has planned to start work on three bridge projects with a total investment of VND18 trillion (USD743.81 million) in 2025.

The VND11 trillion Can Gio Bridge is the largest project, linking Road 15B in Nha Be District and Rung Sac Road in Can Gio District. 

The 7.30-kilometre bridge will have six lanes. Once completed in 2028, it will add to Phu My and Binh Khanh bridges to become the biggest suspension cable bridge in HCM City. It will also help connect the south of HCM City and Can Gio District.

The second largest project is VND6.03 trillion Thu Thiem 4 Bridge. The 2.16-km bridge will have six lanes, with the main span having a clearance of 45 metres. This design will allow large vessels on the Saigon River to easily travel under the bridge.

The bridge is slated for completion in 2028, helping to shorten travel time from Thu Duc City to the districts of Binh Thanh, Nha Be, Binh Chanh and districts 7 and 8.

Meanwhile, the VND1 trillion pedestrian bridge over the Saigon River will link Thu Duc City and District 1.

The 500-metre bridge will be between Ba Son Bridge and the Saigon River Tunnel. The design incorporates the nipa palm leaf, a common sight in the southern region.

The bridge will feature dedicated lanes for pedestrians, cyclists, wheelchairs, and ambulances in case of emergencies. 

Three key trends shaping consumer industry’s journey towards digital maturity

Deloitte's latest report reveals three key trends that encapsulate the forces shaping the consumer industry’s journey towards digital maturity.
 
On January 3, Deloitte released its report on the consumer industry’s journey towards digital maturity. The report seeks to explore the evolution of data analytics and digital commerce strategies among consumer companies in three of Southeast Asia’s largest digital economies, namely Indonesia, Thailand, and Vietnam.

Investments in data analytics have resulted in cost savings and revenue growth, with the majority of survey respondents expecting their organisation’s spending to increase. A third of them reported having experienced a 10-30 per cent saving in their operational costs, as well as an equivalent increase in revenue growth.

This proven value creation potential of data analytics could be one contributory factor to the optimistic outlook on future spending. Nearly two-thirds of survey respondents expect their organisation’s spending on data analytics tools to increase over the next three years, of which 60 per cent expect to see an increase of 10-20 per cent, and another 20 per cent envisage a rise of 20-50 per cent.

Digital marketing capabilities are perceived to be the principal advantage of utilising digital commerce channels. Nearly three-quarters of respondents considered the ability to obtain more effective digital marketing capabilities as the main advantage of digital commerce channels, followed by operational cost reductions (60 per cent) and better customer service (50 per cent).

However, their efforts to utilise digital commerce channels are hindered by several pain points – in particular, those relating to channel conflicts, fears of cannibalisation, and gaps in IT support capabilities.

The report unveils three major trends shaping the consumer industry’s journey towards digital maturity.

The first is building a digital enterprise. By embedding data analytics in their digital commerce strategies, consumer companies across Southeast Asia are looking to capitalise on opportunities to better meet customer expectations and improve business performance. Achieving this, however, will require a doubling down on commercial analytics tools, such as dynamic pricing and digital marketing analytics.

The second is embracing a digital culture. To truly achieve digital maturity, companies will need to focus on making intentional changes to their organisational culture. This, in turn, necessitates the development of a digital mindset, as well as a clear leadership direction.

The last involves adopting a seamless omnichannel approach. Post-pandemic, there has been a noticeable resurfacing of the consumer preference for traditional sales channels. For consumer companies, this underscores the importance of developing and adopting an omnichannel approach – one that seamlessly integrates customer experiences across both online and offline stores.

Foreign-invested enterprises' export turnover accounts for 73 per cent

Foreign-invested enterprises (FIEs) contributed $259.95 billion out of Vietnam’s total export turnover of $355.5 billion in 2023, equalling 73.1 per cent.

According to the General Statistics Office of Vietnam (GSO), in 2023, Vietnam’s export value dropped by 4.4 per cent to $355.5 billion compared to the previous year.

Of the figure, the domestic economic sector grossed $95.55 billion, a decline of 0.3 per cent and accounting for 26.9 per cent of total export turnover, while the foreign-invested sector, including crude oil, raked in $259.95 billion in exports, a drop of 5.8 per cent.

The export turnover of 35 items with export turnover exceeding $1 billion accounted for 93.6 per cent of total export turnover.

Most notably, seven export commodities reported export revenue of over $10 billion, accounting for 66 per cent of total export earnings.

FIEs have played a crucial role in Vietnamese economic growth, which is demonstrated through its contribution to export revenue, job creation, and the formation of supply chains in key export industries, especially in the fields of electronics, machinery, garments and textiles, and footwear.

Furthermore, the country posted a trade surplus for several consecutive years thanks to the significant contribution made by FIEs.

In particular, FIEs account for 99.6 per cent in phones, over 98 per cent in computers, 93 per cent in machinery, and more than 60 per cent in garments-textiles. The country has been listed among the top 20 economies with the largest trade scale in the world thanks to a significant contribution from FIEs.

Statistics indicated that the national economy's import-export scale would exceed $730 billion by the end of 2022. However, due to the unfavourable impacts on the global economy coupled with weakened trade, import-export activities have failed to reach the $700 billion mark, recording only $683 billion.

Ho Chi Minh City, Bac Ninh, Bac Giang, Thai Nguyen, and Haiphong are localities reporting the largest export turnover in the country. These localities are production hubs of “eagles” such as Samsung, LG, Foxconn, Luxshares and Goertek.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes