Vietnam’s economic growth accelerated faster than expected in the second quarter of this year, as a recovery in exports and manufacturing helped offset risks from coronavirus outbreaks and rising oil prices, Bloomberg reported.

The US-based news agency cited data from the General Statistics Office of Vietnam (GSO) saying the Vietnamese economy expanded 7.72% year-on-year in the April-June period, compared to 5.05% of the previous quarter.

That was quicker than the median estimate for a 5.9% gain in a Bloomberg survey, and the highest level since at least the first quarter of 2013, it said.

The performance helped lift growth in the first-half to 6.42% from a year ago, beating the GSO’s forecast for a 5.5% pace. The government targets full-year growth at 6%-6.5%.

The gains in momentum coincide with Vietnam emerging as one of the alternative destinations for foreign investment amid trade disruptions from China’s lockdowns, the war in Ukraine, and lingering tensions between Beijing and Washington.

The economy also benefited from fiscal stimulus worth about 347 trillion VND (15 billion USD), and an easy monetary policy that makes the State Bank of Vietnam one of the last few to resist the global tightening cycle.

“The economic recovery remained strong despite heightened global uncertainties,” the World Bank said in its June report on Vietnam. “Nevertheless, the authorities should be vigilant about inflation risks associated with continuing rise in prices of fuels and imports,” it said.

Global manufacturers gradually focus on Viet Nam
     
Many manufacturers in the global supply chain of major firms are gradually focusing on Viet Nam.

In particular, Apple has moved 11 factories of Taiwanese enterprises in its supply chain to Viet Nam.

Many other firms such as Foxconn, Luxshare, Pegatron, and Wistron are also expanding their production facilities in Viet Nam.

This information was shared at a conference on the situation and proposed tasks and solutions to remove difficulties and support production and business in the last six months of this year, organised by the Ministry of Planning and Investment this week.

Samsung built its largest research and development centre in Southeast Asia worth US$220 million in Ha Noi and is also planning to continue to expand factories in the northern provinces of Bac Ninh and Thai Nguyen.

Earlier this year, Dong Nai Province granted investment licences for two $100 million projects of a component supplier for Samsung, Hansol Electronics Viet Nam (South Korea).

To seize the opportunity, Do Thi Thuy Huong, Vice President of the Viet Nam Association of Supporting Industries (VASI), proposed the Government have large-scale selective policies to attract big foreign groups to Viet Nam.

However, these policies must be accompanied by "clean" production conditions, environmental protection and no discharge into the environment, she noted.

Huong also recommended several issues, such as more supportive policies to improve labour quality and authorities needing to create more favourable conditions for businesses to access credit support policies of the Government.

Previously, Huong said that the root cause of the shifting trends of supply chains to Viet Nam largely came from China's relatively developed electronics and information technology industry.

She explained that they had grown to more than just assembling in the global supply chain.

Viet Nam was a country quite similar to China in electronic manufacturing activities, both in terms of labour and geographical location, infrastructure, and logistics and would be very suitable to receive capital flows, which was also a technological shift.

The VASI Vice President said that, regarding the attraction of large foreign companies, in the early stages, when domestic enterprises were still weak, FDI should be allowed in but must be regulated.

It was necessary to have the hand of the State not only to support foreign businesses but also to have an incubator to support Vietnamese businesses so that they were capable of receiving technology and gradually mastering the technology to have the ability to compete and keep in domestic market, she added.

If enterprises were not strong enough, they could not protect their "soft resources," which was their market, said Huong. 

Vietnam Report announces Top 10 prestigious banks
     
The Vietnam Report JSC has recently published the list of the top 10 prestigious banks in Viet Nam in 2022.

The 10 banks honoured as the most prestigious commercial banks in the country are Vietcombank, VietinBank, Techcombank, Military Bank, VPBank, ACB, BIDV, TPBank, VIB and AgriBank.

Meanwhile, the list of the 10 most prestigious private joint-stock banks comprises Techcombank, VPBank, ACB, TPBank, VIB, HDBank, Sacombank, SHB, OCB and MSB.

The banks have been ranked based on three criteria: financial capacity shown on the latest financial statement, credibility on media evaluated by the Media Coding method, and stakeholder opinions collected in a survey in June.

The survey also showed that 48 per cent of bank customers think the banking industry has been playing a leading role in the country's economic recovery, 77 per cent think banks have been maintaining decent customer services, and 58.9 per cent think banks have managed to adapt their products to the pandemic.

Regarding banking outlook, 63.6 per cent of financial experts expect an industry-wide growth rate higher than last year, whereas 9.1 per cent are cautious about the future. These figures reflect a substantial shift in expert sentiment since the pandemic, as nearly 77 per cent were concerned about the banking downturn in 2020.

The optimistic experts also forecast that credit growth would top 14 per cent in 2022, with retail credit remaining the driving force behind the growth. Likewise, deposits are expected to soar thanks to high-interest rates.

Regarding financial indicators, 54 per cent of banks project Cost-to-Income ratios lower than last year. Amid post-pandemic mounting non-performing loans, 45.5 per cent of banks plan to raise Provision for Risk, 36.4 per cent keep the indicator unchanged, and the rest reduce the hand.

Additionally, 54.6 per cent of banks underscore raising chartered capital as one of their major targets for 2022. It is also worth noting that over 90 per cent will undertake digital transformation across the board, while the rest will embrace it partly.

Regarding credibility in media, a bank is recognised as "safe" when its positive-information-to-total-encoded-information ratio is at least 10 per cent higher than the ratio of negative information and recognised as "best" when the difference surpasses 20 per cent.

The survey showed that 100 per cent of banks had reached the "safe" level and 60.5 per cent the "best" level, indicating that banks have been putting a lot of effort into media management. 

UBO revises up Vietnam’s 2022 GDP growth forecast to 7%

The Singapore-based United Overseas Bank (UOB) has revised up Vietnam’s 2022 GDP growth forecast to 7.0% from 6.5%, assuming no further severe domestic disruptions from COVID-19, and projected growth of around 7.6 – 7.8% in the second half of the year (H2).

It said the projection was based on the strong set of data in the second quarter of 2022 (Q2) and a historical track record of a generally robust H2 performance.

According to the bank, data released by the General Statistics Office of Vietnam (GSO) on June 29 showed Vietnam’s real GDP growth surprised in Q2, expanding 7.7% year-on-year from 5.0% in Q1, surpassing the UOB’s estimate of 6.0% year-on-year.

The sharp rebound in Q2 GDP was driven by manufacturing activities which accelerated for the 4th straight quarter, and a recovery in services output as it continued to regain its footing since the last contraction in the third quarter of last year.

For the first half of 2022, Vietnam’s GDP rose 6.4% year-on-year on the back of a 9.7% gain in the manufacturing sector and 6.6% in services output. Other monthly data released suggest that activities have generally returned to normal after restrictive COVID-19 measures were eased and borders reopened.

The UOB said inflationary pressures on Vietnam are manageable as the main source of impact is energy related while food prices are stable. However, upside risks are significant given the rapid pace of gains in energy prices which will eventually spread to the rest of the economy, especially if higher prices persist.

With the latest set of data, the bank anticipated an official forecast of 6.0 – 6.5% to be revised higher, although downside risks remain. These include the impact of the ongoing Russia-Ukraine conflict on geopolitical developments, energy and food prices, and supply chain disruptions.

“In addition, the US Federal Reserve (Fed)’s aggressive policy bias could be another source of financial market risk for emerging economies such as Vietnam,” it said.

Amidst these uncertainties and despite a more robust domestic economy, there is room for the State Bank of Vietnam (SBV) to stay patient and keep its policy rate steady for now to support the recovery efforts, especially with inflation within its target range.

UKVFTA brings about positive outcomes for both sides: official

The UK-Vietnam Free Trade Agreement (UKVFTA), which took effect in early 2021, has so far brought about positive outcomes for both countries, Deputy Director General Ngo Chung Khanh of the Ministry of Industry and Trade’s Multilateral Trade Policy Department has affirmed.

At a virtual conference on promoting firms’ UKVFTA-induced advantages in Hanoi on June 29, Khanh noted the exports from Vietnam to the UK have grown by 17% and from the UK to Vietnam, by 23%.

Phan Thi Thanh Xuan, Vice Chairwoman of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said the pact has helped Vietnam’s footwear shipments to the UK bounce back from a serious reduction due to Brexit.

As of May 2022, Vietnam’s export of the product to the UK raked in 330 million USD or half the target set for the year.

Xuan said footwear exporters to the market face strict requirements in terms of safety, production, and environmental protection.

Therefore, the capacity of enterprises needs to be greatly improved to be able to meet such requirements, the expert added.

In 2021, despite the impact of the COVID-19 pandemic, trade between the countries reached 6.6 billion USD, equaling that of 2019 and increasing by 17% annually.

According to the data of the General Department of Vietnam Customs, in the first five months of 2022, Vietnam exported to the UK 2.38 billion USD worth of goods and spent more than 304 million USD on products from the market.

Hong Kong daily spotlights Vietnam’s impressive growth

The Lianhe Zaobao daily in Hong Kong, China, on June 30 ran an article highlighting Vietnam’s impressive economic growth of 7.72% in the second quarter.

It wrote that with export and consumption recovery, the Vietnamese economy rebounded strongly in Q2, with gross domestic product (GDP) increasing 7.72% year on year – the fastest pace in almost 11 years.

This is expected to boost the GDP growth in the first half of 2022 to 6.42% from a year earlier, beyond the Government’s 5.5% expectation. The country recorded a growth rate of only 2.04% in the same period last year.

Unveiling the statistics on June 29, the General Statistics Office (GSO) of Vietnam stressed that compared to other ASEAN members and countries in the world, this is a relatively high growth rate, and that the country has also maintained macro-economic stability, according to Lianhe Zaobao.

The article noted since Vietnam gradually lifted anti-COVID-19 measures in late 2021, domestic industries and factories have completely resumed operations, driving the strong recovery of manufacturing and export activities.

International exhibition on agriculture bound for HCM City

More than 200 exhibitors from 25 countries globally will participate in the International Livestock, Dairy, Meat Processing and Aquaculture Exposition (ILDEX Vietnam 2022), according to a press conference held in Ho Chi Minh City on June 30.

The event is expected to provide an ideal venue for firms to seek business opportunities  and partners to diversify their supply chains, promptly restore post-pandemic production, and stay updated on market information and cutting-edge technologies.

ILDEX Vietnam 2022 is scheduled to be held from August 3 to August 5 at the Saigon Exhibition and Convention Center in Ho Chi Minh City. It is expected to attract approximately 10,000 visitors.

A series of seminars and business matchmaking events will be held during the expo to help local firms directly reach potential buyers and expand their  business network.

Vietnamese fish sauce industry seeks ways to expand abroad
     
The Vietnamese fish sauce industry needs to improve food hygiene and safety and diversify products to expand exports.

According to Deputy Minister of Agriculture and Rural Development Phung Duc Tien, just a modest amount of fish sauce was exported, around 12.6 per cent of the country’s total output per year, mainly to the Asian market (54 per cent), the Australian market (18 per cent) and African and European markets (13 per cent each), last year.

There are 17 production establishments currently exporting fish sauce.

Tien said there was significant room for Viet Nam to promote the export of fish sauce, given the country’s favourable natural condition and a wealth of experience in production.

According to the Agro Processing and Market Development Authority, there are more than 4,200 fish sauce production establishments across the country, with an average output of around 380 million litres.

In recent years, the fish sauce industry enhanced the application of science and technology in production to improve food hygiene and safety and meet the requirements of international markets, he said. With a modest share, there was a large potential to promote exports.

According to Luu Duan from the Viet Nam Cuisine Culture Association, the cooperation between the Government agencies and producers promotes the development of the fish sauce industry.

Producers needed support to change the technologies and apply the quality management systems such as hazard analysis and risk-based preventive controls, hazard analysis and critical control points and ISO 22000 to meet the requirements of the US, Australian and European markets.

Businesses asked to use e-invoices from July 1

Except for several special cases, all enterprises, business households and individuals must use e-invoices instead of paper invoices starting from July 1, according to a circular issued by the Finance Ministry.

Under Circular 78/2021/TT-BTC guiding the implementation of a number of articles of the Tax Management Law and Government’s Decree 123/2020/ND-CP on invoicing regulations, before July 1, only firms that received a notification from the tax authorities were required to switch to e-invoices as stipulated in the timeframe issued by the tax department.

Previously, businesses were encouraged to switch to e-invoices if they had necessary infrastructure in place to implement the use of e-invoicing.

Meanwhile, small- and medium-sized enterprises, cooperatives, business households and individuals in areas with difficult and extremely difficult conditions that are not able to make transactions with tax department via electronic methods, and have no accounting software will be exempted from using e-invoices.

In reality, the use of e-invoices has been implemented in all 63 localities across the country since April 2022. However, businesses have still reported many difficulties during the process.

EDPR forays into Vietnam's renewable energy market after taking over a solar PV project

EDP Renovaveis, SA (EDPR), the world's fourth-largest renewable energy producer, on June 30 announced its foray into Vietnam following an acquisition of a 28MW solar photovoltaic (PV) project for a total consideration of $36 million.

EDPR has reached an agreement with Trina Solar, the world-leading PV and smart energy total solution provider, to acquire the Trung Son Solar PV project in Khanh Hoa province.

Put into operation in December 2020, the project has a power purchase agreement (PPA) signed with Electricity of Vietnam under a 20-year feed-in tariff (FiT).

In June, EDPR also inked a deal to scoop up two solar plants in Vietnam with a total capacity of 200MW from Xuan Thien Group. Situated in Ninh Thuan province, the two solar plants have been operated since 2020. The deals have an estimated valuation of $284.

Collectius acquires more than $800 million of non-performing loans in Vietnam

Collectius acquired its first portfolios in Vietnam since entering the market at the end of last year, securing more than $800 million of non-performing loans (NPL) from a local commercial bank.

The deal, which includes a combination of credit cards and personal loans, represents the largest single acquisition made by Collectius to date and signifies a growing need for debt restructuring solutions in the country as loan defaults become more common.

The NPLs were a joint acquisition by Collectius and the International Finance Corporation (IFC), a member of the World Bank Group.

Both parties partnered in 2020 to launch the $60 million Distressed Asset Recovery Platform Programme that focuses on the acquisition and resolution of distressed assets across emerging markets. This programme helped many customers across the region meet their financial obligations and regain creditworthiness. IFC is also a minority equity shareholder in Collectius.

In addition, Collectius recently acquired NPL portfolios from a leading super app in Southeast Asia, as part of a regional deal that covers five countries including Vietnam.

Through these NPLs acquisitions, Collectius now serves more than 195,000 customers in Vietnam and is in discussions with several financial institutions to acquire more portfolios.

HCMC mulls launching HCMC-Con Dao ferry service

HCMC has proposed that neighboring Ba Ria-Vung Tau Province make arrangements to offer high-speed ferry services between the city and Con Dao Island, which is off Ba Ria-Vung Tau.

HCMC Chairman Phan Van Mai said, in a dispatch sent to the southern province, that the passenger transport services using express ferries on the HCMC-Con Dao route will contribute to the growth of inland waterway transport, coastal transport and tourism.

In February this year, the authorities in Con Dao District said two projects to upgrade and expand the Ben Dam port and Con Dao passenger terminal are set to be completed by the end of this year, Tuoi Tre newspaper reported.

The island district will only consider receiving additional passenger vessels after these two projects are done. Therefore, the ferry service between HCMC and Con Dao has yet to be eligible to be put into service at present.

Regarding other ferry services linking with the island, Phu Quoc Express JSC has been offering the service to transport passengers between Con Dao and the Mekong Delta city of Can Tho.

Ba Ria-Vung Tau to break ground on Phuoc An bridge this Sept

The southern province of Ba Ria-Vung Tau is planning to start work on the Phuoc An bridge project in September this year, the provincial government has stated.

The bridge will span over the Thi Vai River, with a total length of 4.3 kilometers long, and cost VND4.879 trillion, funded by the State budget, the Lao Dong newspaper reported.

Once completed, the bridge will link Phu My town of Ba Ria-Vung Tau with Nhon Trach District in neighboring Dong Nai Province.

Ba Ria-Vung Tau has allocated VND100 billion for the construction of the bridge. The Cai Mep-Thi Vai management board of traffic projects is actively working to accelerate the capital disbursement.

QBS sells entire stake at Quang Binh-Dinh Vu ICD

Quang Binh Import-Export JSC (QBS) has announced the completion of the transfer of its 98.63% stake in Quang Binh-Dinh Vu ICD Company to Green Logistics Center Company, with a total value of VND432 billion.

QBS signed the transfer contract with Green Logistics Center Company, a subsidiary of Viconship Company, on April 4 this year.

QBS earlier had contributed VND432 billion, equivalent to a 98.63% stake, to the Quang Binh-Dinh Vu ICD Company.

In the first quarter of this year, QBS saw its revenue plunging sharply to VND42.5 billion from VND268 billion.

Vietnam’s famous rice gains access to Japan

Tan Long Group JSC, in collaboration with Kiraboshi Bank, held a ceremony in Tokyo on June 30 to introduce ST25 rice, which was named the world’s best rice in 2019, to the Japanese market.

Vietnamese Ambassador to Japan Vu Hong Nam appreciated the two sides’ efforts to bring the grain to such a high-standard market like Japan.

Vietnam is one of the world’s leading rice exporters, and the country’s grain has been available in more than 100 markets over the world. But it is the first time the ST25 rice has been shipped to Japan.

The diplomat expressed his hope that more varieties of Vietnamese rice will be able to approach this choosy market.

He revealed that to bring ST25 to Japan, Vietnam must meet over 600 technical standards.

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