The Ministry of Finance has circulated a draft of the revised value added tax (VAT) law, proposing that businesses owned by individuals or households with annual revenue of VND150 million or above be subject to the law.

This proposed VAT threshold is VND50 million higher than the current level.

The rationale behind the VAT threshold adjustment, as explained by the Ministry of Finance, is the significant increase in the consumer price index (CPI) in recent years. This revision aims to align the VAT threshold with rising prices.

The increased VAT threshold would not result in additional compliance costs or administrative procedures for taxpayers, said the ministry.

According to data from the General Statistics Office (GSO), about 5.5 million household businesses nationwide contribute to 30% of gross domestic product (GDP) a year.

The draft proposed that goods exchanged by residents in areas which border other countries enjoy VAT exemption. Conversely, three categories of goods, including imported cigarettes, wine, and beer for export, gasoline and oils, and cars sold in bonded zones, as well as goods and services unregistered for trading in bonded zones, will not be entitled to VAT exemption.

Over the years, VAT has contributed more than 20% to annual state budget revenue, according to the ministry.

Vietnam’s 2023 outbound investments dip 21.2% y-o-y

Vietnam’s 2023 outbound investments totaled US$420.9 million, dropping 21.2% compared to the previous year, according to data from the General Statistics Office (GSO).

GSO data showed that Vietnam had 124 new overseas projects last year, with total pledged capital of US$282.7 million. While this represented a 33.7% fall over 2022, 25 projects underwent capital adjustments, resulting in a 1.3-fold increase and contributing an additional US$138.2 million to outbound investments.

The wholesale and retail sector accounted for 37.3% of total investments, followed by information and communications with a 28.7% share.

Vietnam extended its investment presence to 26 countries and territories in 2023. Canada topped the list, attracting US$150.3 million, equivalent to 35.7% of the total investment. Singapore followed with US$122.6 million (29.1%), and Laos secured US$116.7 million (27.7%).

Minister of Planning and Investment Nguyen Chi Dung emphasized the growing collaboration with Laos, noting continuous development in bilateral investments. Successful projects contributed to socioeconomic development and earned recognition from the Lao government.

Vietnam manufacturing still contracts in December 2023

Vietnam’s manufacturing industry continued to contract in December last year, with the S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) staying at 48.9.

Although this figure showed a slight improvement from November’s 47.3, it remained below the 50.0 no-change mark. This is the fourth consecutive monthly decline.

Throughout last year, the manufacturing sector’s health deteriorated, with improvements seen only in February and August. The average PMI reading for the year was at its lowest since the Covid-19 outbreak in 2020.

The decline in conditions in December was attributed to subdued demand, which led to a decrease in new orders for the second consecutive month. Manufacturers refrained from raising the selling prices of their products, despite notable rises in input costs.

“The final month of the year was indicative of the picture for much of 2023 in the Vietnamese manufacturing sector, with subdued demand limiting production volumes. Firms responded to demand weakness by restricting price rises in December to try and help stimulate new business. This was despite a further marked increase in their own input costs,” said Andrew Harker, economics director at S&P Global Market Intelligence.

As new orders continued to decrease, production volumes were cut for the fourth consecutive month in December. However, manufacturers were optimistic about output expansion in 2024, driven by hopes of recovery in both domestic and export markets, along with business expansion plans.

Despite the drop in new orders, manufacturers maintained stability in employment and purchasing activity. Inventories of inputs decreased for the fourth month, while those of finished goods remained unchanged. Backlogs of work increased for the first time in a year.

“Attention now turns to the prospects for 2024, with firms still optimistic on balance that output will expand. This led to broad stability of employment and purchasing activity despite the reductions in new orders, as manufacturers attempt to maintain capacity in the hope of better days to come,” he added.

The S&P Global Vietnam Manufacturing PMI is a monthly index that measures the performance of the Vietnamese manufacturing sector. It is compiled from responses to questionnaires sent to purchasing managers at some 400 Vietnamese manufacturing companies.

The index ranges from 0 to 100, with a reading above 50 indicating an expansion in the sector compared to the previous month, and a reading below 50 showing a contraction.

Dragon Capital raises stake in Khang Dien

Dragon Capital has increased its ownership in Khang Dien House Trading and Investment JSC, which is listed on the Hochiminh Stock Exchange (HOSE) under stock code KDH.

The fund manager via its affiliates purchased more than one million KDH shares on December 29, 2023, raising its stake in Khang Dien from 10.94% to 11.08%.

Among those, Venner Group Limited purchased 436,900 shares, CTBC Vietnam Equity Fund acquired over 364,900 shares; and Hanoi Investments Holdings Limited got 257,600 shares.

Prior to these transactions, Amersham Industries Limited, a member of Dragon Capital, sold 200,000 KDH shares on December 12.

Regarding Khang Dien’s business performance, the housing developer made VND1.62 trillion in revenue and VND667.2 billion in after-tax profit between January and September, down 3.2% and 31.3% over the same period last year, respectively.

VinFast to build integrated electric vehicle facility in Tamil Nadu

VinFast, Việt Nam's leading electric vehicle (EV) manufacturer, and the Tamil Nadu State Government announce a landmark partnership in a Memorandum of Understanding (MoU) to change the development of green transportation in India. 

VinFast and the State Government will work toward a total investment of up to US$2 billion, with an intended commitment of $500 million for the first phase of the Project, spanning five years from the commencement date. This move indicates a significant step in VinFast's expansion into the world's third-largest vehicle market.

The plan to expand into India aims to seize growth opportunities in the world's most populous nation and rapidly expand the EV market. This initiative forms a crucial part of VinFast's strategy to establish a strong presence in key markets and strengthen its supply chain for global expansion.

Situated in Thoothukudi, the VinFast Tamil Nadu project aims to evolve into a first-class electric vehicle production hub in the region, with an annual capacity of up to 150,000 units. Construction of the plant is anticipated to begin in 2024. This project is set forth to lay a strong foundation for economic growth in Tamil Nadu and India as a whole. 

Vietnam’s VN-Index forecast to soar to 1,460 points this year

The VN-Index, a benchmark for Vietnam’s stock market, is projected to rise to 1,460 points this year given a positive outlook for the market.

This forecast was shared during a webinar, titled “Seeking opportunities amid challenges” and organized today, January 5, by Phu Hung Securities Corporation (PHS).

PHS utilized the price-earnings (P/E) valuation method to make this projection, with an average P/E ratio of 14x. The positive outlook is based on expectations of a robust recovery, including a 15% rise in the average earnings of listed companies and a GDP growth rate of around 6.5%.

Nguyen Thi My Lien, head of Analysis at PHS and a panelist at the webinar, pointed out supportive macroeconomic factors in 2024. Vietnam’s GDP might expand by 6.2%, driven by factors such as low interest rates and an expected 30% spike in international tourism, leading to a projected 12% increase in retail goods and services.

The International Monetary Fund (IMF) has also forecast 5.8% GDP growth for Vietnam in 2024, surpassing regional levels. The Vietnamese Government has set a growth target range of 6% and 6.5% for the year. Optimistic global economic prospects and domestic investment support are expected to help Vietnam achieve its economic growth goal.

The private and public sectors are predicted to make significant recoveries, particularly in public investment, in line with the nearing completion of the mid-term public investment plan for 2021-2025, said Lien.

Le Anh Tri, branch director of PHS in District 3, HCMC, expressed optimism about the Vietnamese stock market’s recovery in 2024. “Investors need additional motivation not just from macroeconomic factors but also from market policies and products to be more active in their trading.”

The anticipated launch of the KRX system, Vietnam’s transition to secondary emerging market status, and economic recovery are expected to further boost the market’s upward momentum.

The KRX system is a technological platform designed to enhance the management and oversight of Vietnam’s securities trading. It will apply modern technology to enhance the management of stock trading in Vietnam, enabling same-day trading settlement (T+0), facilitating short selling, and streamlining payment processes.

When this system is in place, PHS predicted, an average trading value on the Hochiminh Stock Exchange and Hanoi Stock Exchange in 2024 could reach VND21.75 trillion.

However, risks to the market’s recovery and Vietnam’s economy, such as oil price volatility, hardships faced by the real estate market, and the impact of mounting corporate bond debts in 2024, may negatively affect market sentiment and valuation.

Ministry’s lax oversight leads to fuel trading irregularities: Inspectorate

The Ministry of Industry and Trade’s lax oversight has led to irregularities in fuel trading, including the misappropriation of the fuel price stabilization fund and violations in fuel trading licensing and fuel reserves.

At a meeting on January 4, the Government Inspectorate presented its findings from a fuel trading inspection, shedding light on numerous violations involving the Ministry of Industry and Trade and several major fuel trading firms.

Over a span of five years, the ministry issued 37 licenses for fuel export and import, as well as 347 licenses for fuel suppliers. Some of these fuel suppliers failed to establish an effective distribution system after obtaining licenses, causing fuel supply disruptions.

“The ministry failed to promptly detect violations related to maintaining warehouse conditions, storage tanks, and distribution systems,” the Government Inspectorate said.

From 2017 to September 2022, certain fuel suppliers violated regulations by distributing 829,000 cubic meters of fuel inappropriately to take advantage of differential pricing. This had negative repercussions, impacting commissions for retail agents and outlets.

Some fuel traders neglected their responsibility to ensure a stable fuel supply source, leading to interruptions in gasoline supply in 2022.

The ministry’s management of the fuel price stabilization fund also came under scrutiny. Some businesses were able to misappropriate funds from this source due to poor management.

Between January 1, 2017 and April 23, 2018, unclear directives from the Ministries of Industry-Trade and Finance led 19 major businesses to allocate VND1,013 trillion incorrectly from the fuel price stabilization fund, with nearly VND680 billion being misused from the fund.

The fuel price stabilization fund, designed for addressing urgent situations with significant price increases, was repeatedly used by both ministries over an extended period, leading to multiple shortcomings.

In addition, the State Bank of Vietnam did not provide clear guidelines for commercial banks on managing the fund, resulting in seven businesses misusing funds worth over VND7,927 billion.

Given these deficiencies and violations, the Government Inspectorate has recommended that the Prime Minister take action and enforce disciplinary measures against relevant entities and individuals within the Ministry of Industry and Trade and the Ministry of Finance.

The inspectorate has also forwarded documentation to the Ministry of Public Security to consider and address violations related to the use of the fuel price stabilization fund and the declaration of environmental protection taxes at three companies: Thien Minh Duc Group, Xuyen Viet Oil, and Hai Ha Waterway Transport Company.

Railway sector offers 7,000 extra tickets for Tet holiday

In response to the high travel demand before and after the Tet holiday, the railway sector in Vietnam has made an additional 7,000 tickets available for routes connecting HCMC to central and northern provinces during the time for family reunion.

On January 24 and 25, train SE32 will depart from Saigon to Hanoi, and during January 26 and 27, SE11 will be deployed to carry passengers in the opposite direction.

To accommodate the growing demand for travel back to major cities after Tet, additional trains will operate from Quang Ngai and Quy Nhon to HCMC on February 20 and 21, offering 4,000 extra seats on these routes.

Previously, around 3,000 tickets were made available for routes connecting HCMC, Binh Duong, and Dong Nai to stations from Quang Ngai Province to Hanoi and vice versa.

This year, the railway sector aims to offer more than 200,000 tickets for the nation’s longest holiday, equivalent to nearly 400 trips. The highest price will be nearly VND3 million per ticket for the HCMC-Hanoi route, an increase of VND200,000 compared to the previous year.

Currently, there are 3% promotional offers for trains departing from Saigon railway station two days before the Lunar New Year, applicable to travel distances of 1,000 km or more.

Railway tickets can be purchased through various channels, including websites such as dsvn.vn, vetau.com.vn, and giare.vetau.vn, railway stations, authorized agents, digital wallets, or the railway call center.

Vietnam aims for US$55 billion in farm exports this year

Vietnam has set a target of obtaining US$54-55 billion in agro-forestry-aquatic export revenue in 2024.

The objective was announced at a meeting held on January 3 by the Ministry of Agriculture and Rural Development, attended by Prime Minister Pham Minh Chinh, to review the industry’s 2023 performance and outline tasks for this year.

The agricultural sector will focus on boosting production, strengthening cooperation, putting crop and livestock diseases under control, maintaining a stable forest coverage rate of 42%, and minimizing the impact of disasters on agricultural production.

In 2023, the sector underwent a transformation in mindset and growth models, shifting from single-sector development to multi-sector development and integrating multiple values in agro-forestry-fishery products.

This shift led to a remarkable 3.83% GDP growth rate in 2023, the highest in recent years. Additionally, the total export value of agro-forestry-fishery products exceeded US$53 billion, resulting in a trade surplus of more than US$12 billion.

Railway Corporation’s profit target set at US$13.3 mln in period 2023-2025

The Committee for Management of State Capital at Enterprises said that Vietnam Railways Corporation (VNR) set a target of escaping losses and having a profit target of VND323 billion (US$13.3 million) in the period 2023-2025.

The committee requested the unit to prepare to implement the projects of “Restructuring enterprises until 2025” and “Management and use for national railway infrastructure assets invested by the state” right after the Prime Minister approves them, aiming to ensure progress and efficiency.

Moreover, it is essential to actively implement contents related to the high-speed railway investment policy project on the North-South axis and national railway projects toward approvals in the period 2024- 2025.

SJC gold prices continuously fall, 9999 gold slightly increase

After standing at around VND75 million per tael at the end of last week, gold prices continue to fall, reaching VND74 million per tael this morning.

At 9 am on January 8, Saigon Gold and Jewelry Company (SJC) in HCMC announced the buying price of a tael of gold at VND71.5 million, and the selling price was VND74.5 million, down VND500, 000 a tael for buying and selling compared to last week.

At the same time in Hanoi, Phu Quy Gold, Silver, and Gem Stone Group’s gold price also dropped by VND500,000 to VND71.7 million per tael for purchases and VND200,000 to VND74.5 million per tael for selling.

SJC’s 9999 gold for buying was still priced at VND62 million and VND63.51 million for selling, up VND500,000 a tael for buying and selling compared to the previous week.

DOJI Group bought 9999 gold rings at VND62.2 million per tael and sold them at VND63.25 million per tael, adding VND50,000 for buying and selling.

Gold spot price from the international gold market of Kitco was traded at US$2,043.5 per ounce in the morning on January 8 (local time), down US$2 compared to the last week, equivalent to VND60.3 million per tael. It is lower than the domestic SJC gold price by approximately VND14.2 million per tael and also lower than 9999 gold by VND3.2 million per tael.

Prices were down more than one percent last week after hitting a three-week high earlier. Gold is still in the face of fluctuating prices as investors are uncertain about when the U.S. Federal Reserve (Fed) could cut interest rates.

HCMC resolves difficulties for real estate projects

To date, three projects have been successfully addressed following the directives of the Task Force for resolving challenges in investment projects in HCMC.
 
In 2023, the real estate industry in HCMC faced considerable challenges, being the only sector with a negative growth rate of -6.83 percent. The HOREA consolidated and submitted 189 recommendations from 148 real estate projects to the People's Committee of HCMC. Up to now, three projects have been successfully addressed following the directives of the Task Force for resolving challenges in investment projects in HCMC.

Simultaneously, 12 projects are currently undergoing reviews by departments, in line with the directives from the People's Committee of HCMC. Additionally, 41 projects failed to meet the criteria for land-use rights necessary to secure approval for their investment proposals in commercial housing projects. The HCMC Department of Planning and Investment has worked with and informed investors to explore the possibility of altering their objectives from investing in commercial housing construction to investing in social housing or participating in a bidding process to select an investor for the commercial housing project. Dr. Tran Du Lich, Chairman of the Advisory Council for the Implementation of Resolution 98, said that preventing a recurrence of the free-fall scenario, like in the first quarter of 2023, involves considering several factors.

Apart from infusing approximately VND6 trillion into the economy through the disbursement of public investment capital in January, the city should proactively engage right from the beginning of the year to generate momentum. This entails focusing on addressing issues to promptly initiate several real estate projects. According to Mr. Nguyen Ngoc Hoa, Chairman of the HCMC Union of Business Association, the city should synchronously coordinate various policies. For example, there could be a synchronous interest rate support policy for both homebuyers and homebuilders. Furthermore, efforts should be directed towards reinvigorating the middle-income housing segment, given the substantial demand for social housing and affordably priced commercial housing (approximately VND1.5-2 billion per unit).

In 2024, the People's Committee of HCMC aims to actively implement the central government's mechanisms and policies to support business recovery and development, including measures to foster secure, healthy, efficient, sustainable, and integrated markets, particularly in the real estate and social housing sectors. The city will also conduct a thorough review and resolution of obstacles hindering real estate projects, providing support to restore cash flow for businesses. With these initiatives, there is optimism for a more positive growth trajectory in the real estate sector in 2024, as Mr. Nguyen Van Nen, Secretary of the HCMC Party Committee, during the conference to evaluate the socioeconomic development tasks of 2023 and deploy tasks for 2024, highlighted that the market is warming up, based on assessments of real estate traders.

The real estate market is intricate and sensitive, and its true economic value becomes apparent only during a crisis. That is the spread, driving growth and contribution to the Gross Regional Domestic Product (GRDP). Consequently, the city must take responsibility for implementing policies and addressing challenges within this market.

PM urges banking sector to maintain 'blood of life' for national economy

Prime Minister Pham Minh Chinh on January 8 asked the banking sector to maintain its role as the “blood of life” for the national economy, while addressing a conference in Hanoi on January 8.

The conference, held by State Bank of Vietnam (SBV), was connected with the bank’s branches in the 63 cities and provinces nationwide, with the attendance of representatives from different ministries and agencies.

The government leader expressed his delight at the fact that despite a host of difficulties, bank deposits still reached 13.5 quadrillion VND (533.99 billion USD) in 2023, which, he said, demonstrates people’s improved living standards as well as their confidence in the Party, the State, and the banking sector.

He spoke highly of the significant contributions by the central bank and the banking sector in general to national achievements last year, and lauded great efforts and strong resolve displayed by the sector in the year.

The PM also noted some limitations regarding policies, elaborating that some credit mechanisms and policies remain poorly flexible and matching the situation. Besides, he said, ministries and agencies need to tighten their coordination, and inspections and supervisions should be improved.

Highlighting the importance of the year 2024 to the implementation of the 2021-2025 socio-economic development plan, Chinh urged the SBV and the entire sector to join hands with ministries, agencies and localities to fulfill the tasks set for this year.  

The banking sector must help the Government out of a passive position in the rolling out of monetary policies, ensure no corruption, help businesses and people access capital, and serve the rapid, inclusive, sustainable development, he continued.  
 
He also asked the sector to further keep a close watch on domestic and international situation to take timely policy response, and combine monetary policies with fiscal ones harmoniously, with priorities to spurring economic growth in tandem with stabilising the macro economy, capping inflation at about 4-4.5%, ensuring major economic balances, stabilising monetary and foreign exchange markets, and ensuring the safe operation of credit institutions.  

Credit loans should target priority business areas and major growth engines, the leader said, stressing the need to closely control those in the areas with potential risks, and that loans should not focus on only some big firms and clients.  

He suggested the sector offer more credit incentives, take more measures to cut loan interest rates and unnecessary fees, simplify lending procedures and conditions, and step up the application of information-technology and digital transformation.

The legal framework should be reviewed to facilitate the safe, healthy, smooth and sustainable operation of the sector, he said, touching upon human resources development in the sector.

According to a report presented at the conference, the banking sector has contributed to stabilising the macro economy and controlling inflation at around 3.2-3.4% in 2023.

The central bank reduced operating interest rates four times by 0.5 - 2% percentage points in the context that world interest rates continued to rise and remained at high levels.

The bank has set a credit growth target of 15% this year, up 1 percentage point from last year’s target.

Dong Nai lures nearly 500 million USD in FDI in first days of 2024

The People’s Committee of the southern province of Dong Nai presented investment certificates to eight foreign-invested projects worth nearly 500 million USD on January 8.

Of these projects, four were newly-registered projects valued at over 155 million USD, and the rest had their capital added.

SLP Park Loc An Binh Son in the Loc An-Binh Son Industrial Park with a total registered capital of more than 120 million USD is the biggest among the new projects.

The four FDI projects that have their capital adjusted are a coffee production project of Nestlé Vietnam Ltd. Co - Tri An Factory, a production project of Kenda Rubber Company in the Giang Dien Industrial Park, Hyosung Dong Nai Ltd. Co project in the Nhon Trach V Industrial Park and Advanced Multitech Vietnam Ltd. Co project in the Nhon Trach III Industrial Park, with total added amount of 217 million USD.

Speaking at the certificate handover event, Nguyen Thi Hoang, vice-chairwoman of the provincial People’s Committee, said that the issuance of investment certificates to investors in the first days of the year is a positive signal, bringing a good start to the local economy in 2024.

The province pledged to create favourable conditions for investments and stand ready to support them as well as remove difficulties in the implementation of projects.

Hoang also told the investors to heed environmental protection during their business operations and complete the projects as scheduled.

Dong Nai has so far attracted nearly 1,600 FDI projects worth more than 34 billion USD from 44 countries and territories around the world.

Measures sought to remove difficulties for enterprises in Vinh Long

A variety of solutions were proposed to remove difficulties facing businesses operating in the Mekong Delta province of Vinh Long at a dialogue held by the provincial People’s Committee on January 8.

Representatives from businesses engaged in discussions with local officials on various issues related to land clearance support for expanding investment and business operations, addressing difficulties and obstacles in administrative procedures, and providing assistance for small businesses and startups with capital from public funds.

Nguyen Quoc Dat, Deputy General Director of the Vinh Long Water Supply JSC proposed that the provincial People's Committee and the People's Committee of Vinh Long city support land clearance to facilitate the firm’s investment in constructing Truong An 2 water plant in the city.

According to Vo Van Thanh, Director of Vinh Long Investment and Tax Accounting Service JSC, administrative procedures for investment in some areas in the locality remain cumbersome, causing difficulties for businesses when engaging in public administrative services, especially those for business registration and investment licensing.

Vice Chairman of the People’s Committee of Vinh Long city Dang Minh Quan said local authorised agencies will complete the land survey to facilitate clearance and compensation activities.

Vice Director of the provincial Department of Industry and Trade Truong Thanh Su said the centre for industrial promotion and industrial development consulting of Vinh Long supported 21 establishments and businesses in changing machinery, equipment, and packaging designs, and participating in supply-demand connection events in 2023, contributing to fostering rural industrial development.

Meanwhile, Vice Chairman of the provincial People’s Committee Nguyen Van Liet stressed that the locality always pays heed to seeking solutions to promptly address recommendations of businesses.

He promised that the local authorities would continue to focus on improving administrative reform to create favourable conditions for businesses to invest in the province.

Statistics from the provincial Department of Planning and Investment show that Vinh Long’s Gross Regional Domestic Product (GRDP) in 2023 reached nearly 41.5 trillion VND (over 1.7 billion USD), up 2.61% compared to 2022.

Last year, the locality granted investment licences to nine new projects with a total registered capital of over 145 million USD, and approved capital additions of nearly 70 million USD to 12 existing projects.

As many as 458 new businesses and 17 cooperatives were established in the locality in 2023.

PM sets path for Petrovietnam’s continued success in 2024

Prime Minister Pham Minh Chinh has assigned relevant ministries and agencies to remove any existing obstacles as soon as possible, thus providing unwavering support for the Vietnam Oil and Gas Group (Petrovietnam) to further develop and ensure national energy security.

Addressing a hybrid conference in Hanoi on January 8, convened to evaluate Petrovietnam's performance in 2023 and outline tasks for this year, PM Chinh commended the group for its substantial contributions to the State budget, emphasising its role in safeguarding national independence, sovereignty, and territorial integrity.

Petrovietnam should further invest in innovation, digital transformation and green transition, including the development of renewable energy industry, decentralisation coupled with the efficient allocation of resources, and administrative reform, he said.

Agreeing with the group’s tasks and solutions for 2024, the leader urged strict adherence to socio-economic duties in alignment with resolutions and conclusions of the Party, National Assembly, Government, and PM himself.

The oil and gas sector, particularly Petrovietnam, was required to fortify its organisational structure, cultivate a high-caliber workforce, and sustain effective corporate restructuring, equitisation and State divestment initiatives.

He pressed for a comprehensive focus on forecasting, evaluating potential growth drivers across diverse business sectors, and addressing lingering issues in collaboration with relevant sectors and partners.

In conclusion, he believed that Petrovietnam will continue to thrive, successfully achieve its set targets with better results this year.

In a noteworthy achievement last year, Petrovietnam exceeded its annual petroleum reserves target one month and 10 days ahead of schedule, amassing 13 million tonnes, surpassing the annual target by 8.3%.

Financially, Petrovietnam reported a total revenue of 942.8 trillion VND (39.2 billion USD), outstripping the annual plan by 39% and 11.6 trillion VND higher than the record set in 2022. The figure was equivalent to 9.2% of the national GDP. Contributing significantly to the State budget, it provided 151.8 trillion VND, surpassing the annual plan by 94%, equivalent to around 9.4% of the total State budget revenue. The consolidated pre-tax profit reached 54.5 trillion VND, surpassing the annual target by 57%.

For the year ahead, Petrovietnam has set ambitious goals, aiming for a revenue of 734.2 trillion VND, a 56.5 trillion VND increase from the 2023 plan, and a substantial contribution of 94 trillion VND to the State budget.

HCM City lures over 1 billion USD to industrial parks

Ho Chi Minh City has attracted more than 1 billion USD, both new and adjusted capital, to its industrial parks so far this year, surpassing its plan by 83.57%.
 
The HCM City Export Processing and Industrial Zones Authority said of the sum, foreign investment reached 221 million USD, up 12.4% year-on-year, with 16 new projects worth over 63 million USD, and 32 others adjusting their investment capital by more than 157 million USD.

For domestic investment, the country’s southern biggest economic hub lured over 788 million USD, a year-on-year rise of 123.7%.

The HCM City Export Processing and Industrial Zones Authority said administrative procedures have been reformed, adding it has also worked hard to remove obstacles to enterprises and promote investment, production and business.

Besides, the agency has regularly consulted with investors, and paid attention to attracting investment to supporting industries and big high-tech projects as well as.

Notably, ministries, centrally-run agencies and the city itself have stepped up the “one-stop-shop” mechanism, thus creating a healthy administrative environment to attract more investors.

PM urges banking sector to maintain 'blood of life' for national economy

Prime Minister Pham Minh Chinh on January 8 asked the banking sector to maintain its role as the “blood of life” for the national economy, while addressing a conference in Hanoi on January 8.

The conference, held by State Bank of Vietnam (SBV), was connected with the bank’s branches in the 63 cities and provinces nationwide, with the attendance of representatives from different ministries and agencies.

The government leader expressed his delight at the fact that despite a host of difficulties, bank deposits still reached 13.5 quadrillion VND (533.99 billion USD) in 2023, which, he said, demonstrates people’s improved living standards as well as their confidence in the Party, the State, and the banking sector.

He spoke highly of the significant contributions by the central bank and the banking sector in general to national achievements last year, and lauded great efforts and strong resolve displayed by the sector in the year.

The PM also noted some limitations regarding policies, elaborating that some credit mechanisms and policies remain poorly flexible and matching the situation. Besides, he said, ministries and agencies need to tighten their coordination, and inspections and supervisions should be improved.

Highlighting the importance of the year 2024 to the implementation of the 2021-2025 socio-economic development plan, Chinh urged the SBV and the entire sector to join hands with ministries, agencies and localities to fulfill the tasks set for this year.  

The banking sector must help the Government out of a passive position in the rolling out of monetary policies, ensure no corruption, help businesses and people access capital, and serve the rapid, inclusive, sustainable development, he continued.  
 
He also asked the sector to further keep a close watch on domestic and international situation to take timely policy response, and combine monetary policies with fiscal ones harmoniously, with priorities to spurring economic growth in tandem with stabilising the macro economy, capping inflation at about 4-4.5%, ensuring major economic balances, stabilising monetary and foreign exchange markets, and ensuring the safe operation of credit institutions.  

Credit loans should target priority business areas and major growth engines, the leader said, stressing the need to closely control those in the areas with potential risks, and that loans should not focus on only some big firms and clients.  

He suggested the sector offer more credit incentives, take more measures to cut loan interest rates and unnecessary fees, simplify lending procedures and conditions, and step up the application of information-technology and digital transformation.

The legal framework should be reviewed to facilitate the safe, healthy, smooth and sustainable operation of the sector, he said, touching upon human resources development in the sector.

According to a report presented at the conference, the banking sector has contributed to stabilising the macro economy and controlling inflation at around 3.2-3.4% in 2023.

The central bank reduced operating interest rates four times by 0.5 - 2% percentage points in the context that world interest rates continued to rise and remained at high levels.

The bank has set a credit growth target of 15% this year, up 1 percentage point from last year’s target.

European investors upbeat about Vietnam’s business landscape

Confidence among the European businesses operating in Vietnam is showing signs of resilience as the latest Business Confidence Index (BCI) from the European Chamber of Commerce in Vietnam (EuroCham), conducted by Decision Lab,  reached 46.3 points in the fourth quarter of 2023.

EuroCham Chairman Gabor Fluit commented that there was definitely a positive trend underway, and while there was a long way to go for a full recovery, businesses were feeling more hopeful.

“The European business community is increasingly optimistic that the most challenging economic period is now behind,” he said.

The last quarter of 2023 saw a marked increase in satisfaction among the businesses, with firms confident in their current situation rising from 24% in Q3 to 32% in Q4.
 
In Q4, Vietnam’s investment hotspot status increased significantly. An impressive 62% of those surveyed ranked Vietnam among their top ten global investment destinations, with 17% placing it at the very top. This strong endorsement was matched by 53% of respondents anticipating increased foreign direct investment (FDI) in Vietnam by the end of that quarter.

Last year, the potential of the EU – Vietnam Free Trade Agreement (EVFTA) was increasingly realised by businesses. By Q4, a significant 27% of companies reported experiencing “moderate” to “significant” benefits from the agreement, a marked increase from just 18% in Q2.

They said the foremost advantages of the trade pact were “tariff reductions or eliminations” (42%), “increased market access to Vietnam" (27%), and “improved competitiveness in Vietnam” (25%), indicating substantial economic impacts.

However, the BCI survey also revealed challenges in fully leveraging the EVFTA’s potential. About 13% of the 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.

Gabor Fluit said that amidst increasing economic competition in the region and the world, Vietnam should work to complete its policy and strategy so as to lure and maintain foreign direct investment from Europe.

He suggested vital areas to focus on are simplifying administrative procedures, investing in infrastructure to reduce logistics costs, and upgrading the skills of the workforce.

Along with the EVFTA, other bilateral and regional trade pacts are expected to play a key role in transforming the current economic recovery into long-term and balanced growth, he said, adding throughout this ongoing process, EuroCham Vietnam committed to playing a supportive role.

Meanwhile, Decision Lab CEO Thue Quist Thomasen said Vietnam’s long-term economic trajectory suggests a promising path of continued growth, while in the short and medium term, the country is showing its trademark ability to deliver a stable business climate even in turbulent times.

The fifth quarterly measurement within the range of 40-50 index points demonstrated the continued stability and potential improvement in 2024 will underpin the case for further FDI in the country, he added.

The outlook for Q1 of 2024 is also positive, with 29% of enterprises viewing their business prospects as “excellent” or “good” – a sign of diminishing concerns as extreme worries fell from 9% to 5%. Up to 31% of companies plan to expand their workforce in Q1, and 34% intend to increase their investments. The statistics signal a strong momentum for growth and opportunity as Vietnam begins 2024.

The quarterly BCI serves as a vital tool for understanding the perceptions of European and Europe-related companies and investors in the Vietnamese market. Since 2011, the BCI has collected feedback from EuroCham Vietnam’s extensive network of 1,400 members across a diverse range of sectors, providing valuable insights into the current business landscape in Vietnam and offering a glimpse into future expectations.

Vietnam, Canada hold huge cooperation potential in agriculture: Canadian insiders

Agriculture has an important role to play in the cooperative ties between Vietnam and Canada, according to Canadian insiders.

Managing Director of the Canadian Agri-Food Policy Insitute Tyler McCann said that the two countries hold huge potential to enhance agricultural cooperation, which should be given a top priority as it is related not only to the trade ties but also the exchange of expertise and academic experience.

Working with Vietnam will help Canada better access the Indo-Pacific market, he said, elaborating Vietnam is the regional centre for several sectors of agriculture.

Meanwhile, Director of the Food and Agriculture Institute at the University of the Fraser Valley Lenore Newman highlighted Canada’s progress in several fields such as genetic technology that helps create an abundant and climate-resilient fauna and flora system, and application of advanced technologies into food production and processing.

Fraser Valley is looking for partners in Vietnam to transfer its technologies, she said, adding the exchange aims at developing a Pacific Rim ecosystem of agricultural technology for all countries in the region.

Over the past years, Vietnam and Canada have paid due regard to agricultural cooperation so as to contribute to the global security and ensuring food supply chain.

The Canadian Government has sponsored the projects “Food Safety for Development” and “Smart Coastal Community Adapting to Climate Change” in Vietnam, helping the nation develop safe and sustainable agriculture.

Thanks to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which came into force in late 2018, trade of agricultural products between the two countries has risen from 623 million USD in 2017 to more than 1 billion USD at present.

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