Remittances to HCM City have surged 40 per cent in the first nine months of 2023, reaching a total of US$6.6 billion and marking a new record for the January to September period.

The State Bank of Vietnam (SBV) reported that in the third quarter alone, remittances to the country’s largest city amounted to $2.35 billion.

The figure is expected to reach a record high of $7 billion by the end of the year, which is a 7 per cent increase from 2022, according to the SBV.

A significant portion of the remittances originate from Asia, accounting for 53 per cent of the city’s total and reflecting a 20 per cent year-on-year rise.

Nguyễn Đức Lệnh, deputy director of the city branch of the SBV, said the growth can be attributed to the economic and political stability of the region, as well as expanding international economic relations and labour cooperation.

To attract additional remittances, the city will continue to provide incentives such as tax and fee exemptions for recipients, as well as enhance the convenience of money transfer methods, he said.

HCM City has set a target of achieving a minimum annual growth rate of 10 per cent through 2030.

Việt Nam is ranked among the top 10 countries globally in terms of remittances, according to the World Bank.

Around 5.3 million Vietnamese people reside in 130 countries and territories worldwide, with two million having connections to or originating from the city.

Remittances to Việt Nam exceed $10 billion each year. Last year, remittances to the country saw a nearly 5 per cent increase, amounting to $19 billion. 

Hanoi strives to promote cooperation with UK partners

The capital city has made efforts to promote connections, investment, trade, and tourism with British partners in various sectors.

These sectors included finance, high technology, digital transformation, green industry, AI, blockchain, high-tech agriculture, culture, education, and tourism, chairwoman of the Hà Nội Chapter of the Vietnam Fatherland Front (VFF) Nguyễn Lan Hương said.

Local authorities has stood ready to provide the best conditions for British businesses and investors interested in investing and conducting business in the city, Hương said during a recent visit to the UK.

According to the Vietnamese Ambassador to the UK and Northern Ireland Nguyễn Hoàng Long, the two sides had huge potential for cooperation thanks to Hà Nội's unique advantages and the UK’s role as one of two international financial centres.

Currently, the UK ranks 11th among foreign investors in Hà Nội with 80 projects worth nearly US$827 million.

In the first half of this year, Hà Nội's exports to the UK reached $44 million. Among the city's major items to the UK included garments, making up 24 per cent of its exports to the market, machinery and equipment or 19.8 per cent, and footwear or 12 per cent.

During the period, the city imported $58 million worth of goods from the UK, mainly metal and mechanical components, accounting for 54 per cent of its imports from the market; electronic and computer components (4.2 per cent).

The city also welcomed about 81,500 arrivals from the UK in H1.

The capital city said it would continue to improve competitiveness for local businesses so that they might take advantage of opportunities brought by the UK-Việt Nam Free Trade Agreement (UKVFTA).

Under the plan of the municipal People's Committee, top priority would be given to facilitating the development of small and medium-sized enterprises through capital, training, access to markets and information and technology.

The city would also help local businesses link with each other, create value chains and supply chains with the participation of UK businesses to take advantage of the UKVFTA while encouraging the UK-invested businesses to team up with local firms to build and develop these supply chains. 

Real estate firms witness divergent performance in Q3

Prominent real estate companies reveal varying levels of success within the market, as demonstrated by different revenue and profit figures in the third quarter.

Vinhomes Joint Stock Company (VHM) stands as the top player in the real estate market in terms of revenue and profit. During the third quarter, Vinhomes achieved a total net revenue of VNĐ32.7 trillion, marking an impressive 84 per cent increase compared to the same period in 2022.

For the first nine months of the year, Vinhomes' total net revenue reached VNĐ94.6 trillion, with a consolidated profit after tax of VNĐ32.4 trillion. This represents a 62 per cent growth compared to the same period of 2022 and surpasses the annual plan for 2023.

As of September 30, Vinhomes held cash and cash equivalents amounting to VNĐ2.91 trillion. Within the third quarter alone, Vinhomes' cash equivalents amounted to VNĐ427 billion. Vinhomes clarified that cash equivalents include investments and deposits in commercial banks ranging from one to three months, with interest rates ranging from 3.3 per cent to 6.2 per cent.

The second-largest real estate enterprise, Novaland Group (NVL), has returned to profitability after experiencing losses in the first two quarters of the year. In the third quarter, Novaland achieved a revenue of over VNĐ1.07 trillion and a profit after tax of VNĐ137 billion.

In the first nine months, Novaland's total consolidated revenue, including sales and service provision fees, reached VNĐ2.74 trillion, despite recording a loss of nearly VNĐ960 trillion.

As of September 30, Novaland held cash and cash equivalents amounting to VNĐ3.43 trillion, which represents a 60 per cent decrease compared to the end of the previous year.

According to Novaland, cash equivalents comprise bank deposits with original terms of one to three months and interest rates ranging from 2.5 per cent to 6 per cent per annum.

Quốc Cường Gia Lai Joint Stock Company (QCG) reported a revenue of nearly VNĐ67 billion, representing an 87 per cent decline compared to the same period. The company's revenue structure indicates that it does not generate any revenue from real estate business activities. QCG's revenue solely comes from two segments: selling goods (over VNĐ18 billion) and selling electricity (nearly VNĐ49 billion).

On the other hand, LDG Investment Joint Stock Company (LDG) experienced a net loss of VNĐ65 billion in the third quarter, marking the fourth consecutive quarter of losses for the company. When combined with losses from the first and second quarters, LDG's net loss currently exceeds VNĐ209 billion, while it had a profit of over VNĐ8 billion during the same period last year.

As of September 30, LDG possessed total assets of nearly VNĐ2.09 trillion, reflecting a 14 per cent decrease compared to the beginning of the year. However, the amount of cash and cash equivalents reached VNĐ47 billion, which is 15 times higher than the beginning of the year, with most of it being in the form of bank deposits.

Phát Đạt Real Estate Development Joint Stock Company (PDR) recorded cash and cash equivalents of nearly VNĐ53 billion in the third quarter, indicating an 80 per cent decrease compared to the end of the previous year.

As of September 30, Đất Xanh Group Joint Stock Company (DXG) reported cash and cash equivalents amounting to VNĐ644 billion, representing an almost 42 per cent increase compared to the end of the second quarter. Among this amount, cash equivalents account for nearly VNĐ243 billion, deposited with an original term of no more than three months in banks, earning interest rates ranging from three per cent to three per cent per annum. The remaining VNĐ401 billion consists of cash.

Nam Long Investment Joint Stock Company (NLG) held cash and cash equivalents of VNĐ2.67 trillion at the end of the third quarter, representing a 15.3 per cent increase compared to 30 June. Within this amount, NLG recorded VNĐ929 billion in cash and VNĐ1.75 trillion in cash equivalents.

Removing barriers to consumer loans an effective way to combat loan sharks

Removing barriers to consumer loans remains one of the most effective methods to combat loan sharks, heard participants at a seminar in Hà Nội.

Nguyễn Quốc Hùng, deputy chairman and secretary-general of the Vietnam Banking Association (VNBA), said as many low-income workers still have difficulties in accessing proper banking services, finance companies have been a big help in preventing them from falling victim to loan sharks.

However, many companies have been struggling financially in recent years due to rising bad debts and negative perceptions by consumers.

"There have been instances in which borrowers flat out refused to repay, even putting up a fight against collection agents," he said.

Hùng stressed the importance of such companies as they serve as parts of the Comprehensive National Financial Strategy until 2025, with a vision for 2030 approved by the Prime Minister's Office, tasked with developing consumer loan products suitable for low-income workers with suitable interest rates, higher than those from banks but more easily accessible.

In addition, they greatly contribute to the government's effort in combating loan sharks, which has been running rampant, especially affecting the low-income population.

"Some consumers still harbour a misconception that licensed finance companies are operating in the same manner as loan sharks. There have been instances in which they even created groups on social platforms to help others refuse payment, taking advantage of the recent government's crackdown on loan sharks and the black credit market," Hùng said.

It has resulted in rising bad debts among finance companies, with many collection agents quitting their jobs, severely undermining their ability to expand.

According to a recent report by the VNBA, projected debts for the industry have decreased by more than VND60 trillion in comparison to 2022. Without smaller finance companies, low-income workers will be extremely vulnerable to loan sharks.

"We have observed a resurgence of loan sharking activities in recent months, especially on social platforms, despite stronger crackdowns by law enforcement," he said.

At the seminar, industry insiders called for clear legal guidelines to help govern and protect licensed finance companies, as well as sterner measures by the laws for individuals who deliberately seek out ways to refuse to make repayments.

Nguyễn Thị Minh Nguyệt, a deputy CEO from FE Credit, one of the country's leading consumer loan companies, said the company had recorded 24 cases in which its collection agents were assaulted in 2023, a sharp increase from just 2 cases recorded in 2022.

She said that FE Credit and other consumer loan companies do not employ or condone extreme debt collection practices and that FE Credit has consistently operated in compliance with legal regulations stipulated by the State Bank.

Nguyệt attributed borrowers' negative responses to a lack of legal responsibility and financial knowledge, as well as a lack of deterrent in current laws and regulations.

She, however, acknowledged that some collection agents could have made mistakes and caused inconveniences to customers. However, she stressed that they were not the company's policy and that measures are being taken to reduce agents' errors.

Regarding interest rates, a representative from FE Credit said rates are based on various factors including each company's input cost, the amount of collateral, and borrowing terms. As low-income workers could not produce meaningful amounts of collateral, it often meant a higher risk for lenders and therefore, higher rates. 

Garment firms lay off thousands amid losses

Many garment and textile companies in Vietnam are facing financial difficulties due to falling orders, leading to the laying off of thousands of workers. 

Garmex Saigon Corporation has just announced in their financial report for the third quarter of 2023 that they made a revenue of just VND 73 million during the period.

Company general director, Nguyen Minh Hang, said that the revenue came from their services while they had no orders in the third quarter.

"Although we have slimmed down production activities and laid off more workers, rising rent has added to our costs," she said. "We continued to incur losses of nearly VND11 billion in the third quarter. We'll try to reduce operational costs and consider selling some assets to overcome this difficult time."

Garmex Saigon Corporation reported revenue of VND8.10 billion in the first nine months of this year, down 97 percent compared to the same period last year. The company reported losses of VND 44 billion during the period, compared with losses of VND 6.80 billion in the same period last year.

By the end of September this year, Garmex Saigon only had 37 employees after laying off four workers. That was a sharp cut-off from over 1,900 employees in 2022 and over 3,700 in 2021.

Statistics from the Ministry of Industry and Trade showed that garment exports only brought USD29.10 billion in the first nine months, far below the target of between USD 45-48 billion for this year. Meanwhile, firms predicted that the difficulties may last longer.

Speaking with Lao Dong Newspaper, general director of the Garment 10 Corporation, Than Duc Viet, said that they were seeing falling orders for their most important products of shirts and having to turn to other products to maintain operation.

"Shirts used to make up 60 percent of our orders but now have reduced to 30 percent," Viet said. "We've had to turn to making trousers, polos, and T-shirts to maintain our business. The work-from-home modes to reduce costs in many countries have led to a falling demand for shirts."

Speaking at a recent meeting, chairman of the Vietnam National Textile and Garment Group, Le Tien Truong, said that the market may slightly improve next year but demand will still be between 5-7 percent lower compared to 2022.

"Despite the challenges, there are some positive signs for the coming time including opportunities to source fibre from China or FDI firms producing more clothes in Vietnam using local fibre," he said.

Truong urged local firms to try to overcome this year and make careful plans for 2024 with revenues rising between 3- 5 percent, and profits up by between 85-100 percent against 2023.

NA deputy urges stronger development of supporting industries

A National Assembly (NA) deputy has proposed that the Government introduce more policies to boost the development of supporting industries, with a specific emphasis on the manufacturing sector.

At the ongoing sixth sitting of the NA on October 31, NA deputies discussed the country’s economic and social development plan. One of the key topics in these discussions is the promotion of supporting industries.

The deputy from Hung Yen Province suggested that the NA and the Government establish specific mechanisms and policies for the development of supporting industries, particularly the manufacturing industry.

He emphasized that it was important to encourage small and medium-sized enterprises in supporting industries to invest in technology and advanced equipment in their operations. Further, efforts are needed to aid human resource training in production management and business management systems.

Moreover, the authorities should establish specific mechanisms to prioritize investors and contractors using domestically manufactured mechanical products or placing orders for domestic businesses to produce, instead of relying on imports.

On the same day, deputies also discussed public investment, emphasizing the need for solutions to remove bottlenecks in public capital disbursement and land clearance.

It is necessary to review and evaluate the efficiency of public investment projects in order to timely prevent investments in ineffective or unnecessary projects, which can result in waste.

Deputies also recommended that the Government take swift action to tackle supply chain challenges in construction materials, maintain price stability, resolve issues in the execution of real estate projects, and support the real estate market.

Halal market still has room for Vietnam exporters

With more than two billion Muslims living in 112 countries and territories, the Halal market has considerable potential for Vietnamese businesses to boost their exports.

The HCMC Investment and Trade Promotion Center (ITPC) on October 31 held a forum on cooperation and development of the Halal industry in ASEAN to explore opportunities for Vietnamese businesses to join the international Halal supply chain. The event sought to strengthen the relationship between Vietnam and Muslim countries in the Association of Southeast Asia Nations (ASEAN).

Muslims make up 25% of the world’s population, and about 62% of the world’s Muslims live in Asia, with Indonesia having a large population.

A report issued by the Food and Agriculture Organization of the United Nations detailed how the global Muslim community’s spending on Halal food is increasing, which is expected to reach US$1.9 trillion by 2024 and US$15 trillion by 2050.

The development of the Halal industry will become a stimulus for the development of related sectors and services, said the report.

The event also creates opportunities for Vietnamese businesses to attract Muslim investors and tourists to Vietnam, contributing to the country’s development and strengthening cooperation with the 57 member countries of the Organization of Islamic Cooperation (OIC).

According to Vo Van Hoan, vice chairman of HCMC People’s Committee, there are increasing numbers of service complexes satisfying Halal standards in HCMC, while businesses in HCMC qualifying for Halal export standards have increased, in terms of volume and quality, over the past years.

To tap this potential market, HCMC is applying measures to orient the development of the Halal industry, in combination with green production and consumption and sustainable exports, as outlined by the city. HCMC will also introduce policies to support the development of the Halal industry in the near future, focusing on food, logistics and warehousing.

EVN still in financial distress despite electricity price hike

Vietnam Electricity Group (EVN) has said it is still grappling with financial woes despite a 3% increase in retail electricity tariffs, which has been applicable since May 4 and is expected to boost EVN’s revenue by VND8 trillion this year.

EVN said that several factors had continued to affect costs of electricity generation and distribution this year. The estimated cost of electricity production stands at some VND2,100 per kWh, about VND178 higher than the average retail price.

Climate-related issues have played a role in EVN’s difficulties, with the water levels of major hydroelectric reservoirs ebbing towards the end of the dry season. Repeated disruptions in large thermal power plants have also strained supply.

EVN expects to produce 13.9 billion kWh less hydropower in 2023 than expected by the Ministry of Industry and Trade, but will increase coal-fired power generation by 9.3 billion kWh, diesel-fired power by 1.2 billion kWh, and renewable energy by 1.3 billion kWh. These figures represent significant changes compared to 2022, with a sharp drop in hydropower generation and considerable increases in coal, oil, and renewable energy production.

Rising input costs have put a heavier burden on EVN, with the cost of imported coal surging by 2.97 times versus 2020, and 1.3 times against 2021. Similarly, the cost of oil has risen by 1.86 times compared to 2020 and 1.13 times compared to 2021.

EVN has taken cost-cutting measures to ease its financial woes, with total savings put at over VND4.3 trillion in the first nine months of this year. Savings have been achieved by cutting 10% of regular expenses and reducing major repair and maintenance costs by 20-30% across all member units. Consequently, the costs associated with electricity transmission, distribution, and retail have steadily decreased over the years.

However, electricity generation costs heavily depend on the power generation stage, accounting for a substantial 82.8%. Thus, fluctuations in generation costs have a significant impact on the overall production cost of electricity, resulting in high production costs.

Vietnam’s aqua product exports to EU receive warnings on food safety

The European Union (EU) has announced that significant amounts of Vietnam’s aquatic product exports have failed safety tests and are being carefully monitored.

Officials said that out of a random sampling of 20% of Vietnam’s aquatic product imports to the EU, 7.3% did not meet food safety standards, indicating a severe alert level, according to the Directorate General for Health and Consumer Protection of the European Commission (DG SANCO).

Tran Ngoc Quan, trade counselor of the Vietnam Trade Office in Belgium and the EU, shared the information during a trade promotion meeting held by the Ministry of Industry and Trade on October 31.

According to Quan, in the October report on supervising food safety and quality, the European Commission put Vietnam under its supervision. Previously, the EU had conducted a review and assessment on the country’s overall fishery development program over the past years.

Notably, the EU recommended supervising food safety on aquatic products imported from Vietnam. This move comes following a recent random testing of Vietnam’s aquatic product exports to the EU, which indicated a high volume of products failing to meet quality standards.

For the EU, that 7.3% of samples not meeting food safety standards is extremely severe, Quan said, adding that the Vietnam Trade Office in Belgium and the EU is working with EU authorities to follow up and report on each food sample presenting a violation.

It should be noted that businesses eligible for exporting aquatic products to the EU are those that have already had food product codes for export. This means that despite measures on food safety controls that were previously applied to aquatic product exports from Vietnam, the products have yet to meet the EU’s quality standards.

The Vietnam Association of Seafood Exporters and Producers (VASEP) and localities have been urged to instruct businesses on how to strictly comply with requirements on food safety and quality, to secure their foothold in the EU market.

Work to start on Ho Chi Minh Road section

The Ho Chi Minh Road Project Management Board has announced that construction of a section of the Ho Chi Minh Road in southern Vietnam will soon commence following the selection of a contractor.

Deo Ca Group, which won the XL1 contract, is responsible for constructing the 73km section connecting Chon Thanh in Binh Phuoc Province and Duc Hoa in Long An Province through Binh Duong and Tay Ninh provinces.

The contract includes building six bridges along the section. The contract is valued at VND6.8 trillion and expected to be completed within 730 days.

A representative from the Ho Chi Minh Road Project Management Board said that they are currently seeking approval from the relevant authorities for the selection of contractors for the remaining two contract packages, XL2 and XL3. It is anticipated that this process will be completed by the end of the year.

Work on the Chon Thanh-Duc Hoa section began in 2009 but was suspended in 2011 due to the Government’s shift in priorities towards curbing inflation and stabilizing the macroeconomy to ensure social welfare.

The first phase of the section will have two lanes with a width of 11 meters. Later, it will be expanded to six lanes. The project requires approximately VND2.3 trillion.

The resumption of this project aims to ensure the seamless connection of the entire Ho Chi Minh Road. This will contribute to reducing traffic congestion on the vertical axis of the southeastern region.

Vietnamese remain optimistic despite economic concerns: UOB

Vietnamese consumers display a remarkable resilience in their optimism about 2024, despite concerns about economic woes, according to a recent study by Singapore’s United Overseas Bank (UOB).The UOB’s fourth annual ASEAN Consumer Sentiment Study (ACSS), released on November 1, assessed consumer trends and sentiments across five Southeast Asian countries: Singapore, Malaysia, Thailand, Indonesia and Vietnam.

The study indicated that 76% of Vietnamese consumers are optimistic about their financial prospects in the coming year, ranking higher than their counterparts in Indonesia (74%) and Thailand (68%).

Across the ASEAN region, the primary concerns include increasing inflation, with 62% of respondents highlighting it as their top worry, while 57% express concerns about the rising cost of living. In Vietnam, these concerns are even more pronounced, with 66% and 62% of respondents expressing unease about inflation and living expenses, respectively.

Eight out of 10 Vietnamese consumers harbor concerns about their financial situation, with the top three worries revolving around savings (32%), maintaining their current lifestyle (32%), meeting financial needs and caring for their parents’ health (30%). As a result, 65% of Vietnamese consumers are closely monitoring their spending through online banking platforms, and 60% are actively exploring products with promotions, rewards, or savings.

Financial preferences are evolving among Vietnamese consumers, with more of them allocating resources to low-risk financial instruments, such as fixed bank deposits (32%) and insurance plans (28%). Notably, 25% of Vietnamese consumers are investing more in insurance products compared to the previous year, a four-percentage-point increase over the regional average, particularly within the affluent consumer segment (36%).

Sustainability is also a growing area of interest among Vietnamese consumers. The survey found that 40% of respondents have incorporated sustainable investments into their portfolios, while 58% are open to such investments, provided they align with their risk tolerance. An impressive nine out of 10 consumers believe that sustainable investments can yield both financial returns and environmental benefits.

With an increasing level of digital proficiency, the use of mobile banking applications has experienced a significant surge in Vietnam. A striking 54% of respondents have increased their use of these platforms over the past year. Over half of those surveyed now prefer online channels for international money transfers and reward point checks. For more complex or high-value transactions, consumers still value a combination of online and in-person interactions.

Concerning payment methods, Vietnamese consumers demonstrate a strong grasp of the latest technologies, with e-wallets, mobile app-based card payments, and e-commerce payment platforms being the most popular, with respective usage rates of 67%, 58%, and 55%.

Four out of five Vietnamese consumers use e-wallets at least once a week and are eager to recommend them to others. The top choices in the e-wallet landscape include Momo, ZaloPay and VNPay.

Paul Kim, head of Personal Financial Services at UOB Vietnam, underscored the role of Vietnam’s robust economic growth in boosting consumer confidence regarding their financial well-being in contrast to their regional counterparts. Despite ongoing concerns about high inflation, a notable positive trend is the steadfast embrace of the digital era by consumers.

Extension proposed for low-interest loan package

Given the slow pace of disbursement of the two-percentage-point interest support package, the Government has suggested extending this loan program until the end of the year.

Speaking at the National Assembly’s plenary session on November 1, Minister of Planning and Investment Nguyen Chi Dung said the disbursement of the loan interest support package, as part of the nation’s economic recovery program under National Assembly Resolution 43, has been progressing slowly.

He said that as of late October, only VND873 billion of the VND40 trillion allocated for the package has been disbursed, accounting for just 2.3% of the total value.

The Government has therefore sought the National Assembly’s approval to extend the deadline for the support package until the end of this year. Any allocated funds that remain undisbursed by year-end will be canceled.

The Government will propose alternate fiscal policies to support businesses, including the extension of value added tax (VAT) reduction, and exemptions on fees and charges.

Minister Dung highlighted psychological factors and challenges in interpreting the regulations as the primary causes for the slower-than-expected disbursement of the package. He emphasized that challenging economic conditions in recent times have hindered eligible businesses, as well as those that do not meet the support package’s requirements, from borrowing funds from banks.

Vietnamese milk tea and pho brands expand franchise presence in Philippines

Three Vietnamese businesses, namely Pho’S, Phuc Tea milk tea, and Care With Love spa, have clinched franchise agreements with their partners in the Philippines.

During the launch event of the Go Global Franchise Fund (GGFF) on November 2, a representative from Go Global Holdings said that this marks the first occasion when three out of the nine businesses within the Go Global Holdings ecosystem have successfully expanded their franchises into the Philippines.

Among them, the spa brand Care With Love and milk tea brand Phuc Tea have signed master franchise contracts with their partners. The first Care With Love store in the Philippines is expected to open within the next two months.

Meanwhile, the franchise partners of the Phuc Tea brand plan to open around 20 stores in Manila by 2024.

Pho’S will establish its first three points of sale in the Philippines and enhance the franchise contract following the successful operation of these branches. The first franchised store is slated to open in the first quarter of 2024.

In addition to the Philippines, these three businesses are currently in negotiations for franchise collaborations in the Indonesian and Malaysian markets.

Go Global Holdings also announced the launch of the Go Global Franchise Fund (GGFF), an investment fund exclusively dedicated to startups and small to medium-sized businesses in the franchising and licensing sector in the Vietnamese market and the Southeast Asian region.

Agro-fishery-forestry exports bounce back in October

Agricultural, forestry, and aquatic exports rebounded in October, with a value of US$4.81 billion, according to the Ministry of Agriculture and Rural Development.

The figure shows an 11.9% increase from the same period in 2022. Agricultural exports played a significant role this growth, surging by 31% to US$2.47 billion, while livestock exports increased by 6% to US$40 million.

The forestry sector experienced a marginal 0.2% decrease to US$1.28 billion, while aquatic exports recorded an almost 6% drop to US$850 million.

Cumulative data for January to October 2023 showed that agricultural, forestry, and aquatic exports had witnessed a 4.2% year-on-year decrease, to US$43.08 billion. This decline may be attributed to a steep fall in forestry and aquatic exports, whose export value had dropped 19.3% to US$11.65 billion and 20.5% to US$7.45 billion, respectively.

Falling prices of certain agricultural products, such as rubber (down 17.3%), black pepper (down 23.4%), and cassava products (down 3.3%), also contributed to the overall decrease.

Despite the challenging export environment, the agricultural sector emerged as a bright spot, achieving exports worth US$21.94 billion, up 17% over the same period last year.

Key contributors to this growth included soaring vegetable and fruit exports, which surged by 78.9% to US$4.91 billion, rice exports, which increased by 34.9% to US$3.97 billion, and cashew exports, rising by 14.8% to US$2.92 billion. Livestock product exports also saw a significant increase of 22% to US$402 million.

China continued to be Vietnam’s top trade partner, with exports accounting for 22.8% of Vietnam’s total exports in 2022, a 16.2% year-on-year increase. However, exports to the U.S. and Japan experienced declines of 20.8% and 8.5%, respectively, constituting 20.6% and 7.5% of Vietnam’s total exports.

Vietnamese goods resume growth trajectory

After a series of export declines, Vietnamese goods have regained growth momentum since October 2023, the Ministry of Industry and Trade announced on the afternoon of November 2.

Specifically, in October, the estimated export turnover reached US$32.3 billion, up 5.3 percent compared to the previous month. Over the first ten months of 2023, the estimated export turnover amounted to $291.28 billion, still showing a 7.1 percent decrease compared to the same period last year, primarily due to export market challenges in many months. However, these results also show that the decline in export growth has narrowed significantly from the 12 percent drop in the first half of 2023.

During the first ten months, 33 commodity groups achieved export turnovers surpassing $1 billion, constituting 92.9 percent of the total export turnover. Of which, seven commodity groups saw export turnovers exceeding $10 billion, accounting for 66.2 percent.

In the first ten months, the US retained its position as Vietnam's leading export destination, with an estimated turnover of $78.65 billion, despite a 15.8 percent decline compared to the same period last year. China emerged as the second-largest export market for the country, reaching an estimated turnover of $49.5 billion, reflecting a 5 percent increase. This achievement is noteworthy in light of declining exports to most of the key markets.

Export turnover to other major markets also dropped, with the EU market experiencing an 8.9 percent decrease, the ASEAN market falling by 6.2 percent, South Korea posting a 3.6 percent decline, and Japan going down by 4.1 percent.

On the contrary, exports to markets in Western Asia climbed by 8.7 percent, and the African market grew by 6.1 percent. This demonstrates the efforts of businesses in diversifying their market presence and concentrating on exploring new markets that still hold substantial potential.

A positive development in Vietnam's commodity export performance over the past ten months has been the reduction in the rate of decline in exports, with a 7.1 percent decrease for this period compared to a 12 percent decline in the first half of 2023.

In comparison to the same period last year, the growth in commodity export turnover in October for the domestic economic sector was three times higher than that of the foreign-invested sector, including crude oil, with a 15.1 percent growth compared to a 3 percent increase.

In the first ten months, the slump in commodity export turnover for the domestic economic sector was merely half of what was witnessed in the foreign-invested sector, including crude oil. This underlines the domestic economic sector's efforts to sustain and enlarge its export market share in the midst of global economic adversities.

Many agricultural commodity groups, such as rice and fruits, capitalized on market opening and increased prices to boost exports, resulting in the sole growth of 3.8 percent in the first ten months.

In spite of declining global market demand, Vietnamese businesses have excelled in diversifying their market presence over the past ten months. Effectively implementing export solutions to neighboring countries with shared borders, ensuring minimal congestion of essential goods, even during peak seasons, has played a crucial role in increasing export turnover to the Chinese market.

According to the Ministry of Industry and Trade, this is the only export market among Vietnam's major export markets that has achieved positive growth (5 percent), while other major markets have seen declines.

The trade balance continues to maintain a surplus, contributing to macroeconomic stability, ensuring a significant balance in the national economy, and providing substantial support to the international payment balance.

HCMC: Industrial production sees high consumption index over 10 months

HCMC’s industrial production has been trending upward between January and October, with high consumption indexes on some of its major products, and in some industrial sectors.

The municipal Department of Industry and Trade report indicates that a number of key industrial product groups experienced significant year-on-year growth in the period. They include plastic packaging materials with a 36.1 percent increase, mineral or chemical fertilizers 26.2 percent, condensed milk/cream with or without sugar 12.7 percent, and TVs 10.8 percent, among many others.

The ten-month industrial production index of the city's four key industrial sectors grew by 6.3 percent year on year.

In October alone, the consumption index of the local processing and manufacturing industry climbed by 2.3 percent compared to the previous month and by 19.9 percent against the same period last year, signaling its recovery in the remaining months of the year.

Meanwhile, the industrial labor index inched up 0.5 percent month-on-month and declined 3.2 percent year-on-year.

Experts have assessed that the southern economic hub possesses strengths in terms of good logistics infrastructure and regional and international transport connectivity. Additionally, it continues to take the lead regarding geographical advantages, local brand, and high-quality workforce.

However, the industrial business community in the city and their peers nationwide are facing challenges related to the increasing cost of production. Currently, labor costs, space rental costs, and land leasing fees at export-processing zones and industrial parks are issues that require direct solutions from the municipal authorities.

63 percent of HCMC’s outstanding credit with interest rates below 10 percent

Outstanding loans in the five priority sectors amounted to around VND200 trillion, with short-term interest rates in VND capped at 4 percent per annum.

On November 2, Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam - HCMC Branch, announced a substantial reduction in interest rates for loans to businesses and business households within the HCMC area, including existing loans.

As of now, about 63 percent of outstanding credit in HCMC carries interest rates below 9.75 percent, while the rest features interest rates below 10.53 percent, mainly for medium and long-term loans. Currently, loans for the five priority sectors total around VND200 trillion, with short-term interest rates in VND not exceeding 4 percent per annum.

Mr. Lenh also revealed that, up to this point, close to 35,000 businesses, business households, and cooperatives in HCMC have undergone debt restructuring and have kept their debt categories intact, resulting in a total outstanding debt of nearly VND39 trillion, which accounts for 27 percent of the national total. Additionally, the disbursement of the 2-percent interest rate support package, in accordance with Government Decree 31, has reached roughly VND23.23 trillion, benefiting 392 borrowers and constituting 36 percent of the nationwide total.

Furthermore, through the Banking-Business Connection Program, HCMC-based commercial banks have disbursed credit packages with preferential interest rates, amounting to VND520 trillion, equivalent to 114.7 percent of the VND453 trillion credit package that 20 banks registered at the beginning of the year.

"The policy of reducing loan interest rates has created conditions for businesses to reduce borrowing costs, alleviate the pressure of loan repayment, and restructure debts appropriately to sustain, stabilize, and develop, facilitating effective cash flow management and capital circulation. This contributes to assisting businesses in overcoming difficulties, promoting economic growth and development," Mr. Lenh stated.

Vietnam’s exports on recovery track

Vietnam is experiencing a gradual recovery from the global trade slowdown, and exports are likely to accelerate as order volumes increase.

HSBC's assessment was based on Vietnam's ongoing recovery from the global trade slowdown, with exports likely to continue gaining momentum on improved orders. In October, the data from the General Statistics Office showed that the country's merchandise export turnover amounted to approximately $32.31 billion. This represented a 5.3% increase compared to September and a 5.9% growth over the same period in 2022.

However, this recovery has been uneven. Out of the 34 major export categories, 15 experienced growth, driving the overall increase in exports in October. Consumer electronics (excluding phones) have rebounded, but the textile, garments, and footwear sectors continue to face declining order volumes.

S&P Global Market in its latest report noted that new orders for Vietnamese goods rose for the third consecutive month, reflecting improved customer demand. Nevertheless, this growth rate is relatively modest and among the weakest levels in the current growth period. Incomplete data suggest that customers remain cautious about committing to new orders.

Andrew Harker, the chief economist at S&P Global Market, pointed out that the current rate of growth in new orders isn't substantial enough to incentivize companies to ramp up production. Instead, businesses are using existing inventories to meet customer demands.

The S&P survey also highlighted a positive signal: the number of jobs has remained relatively stable, ending a 7-month decline. This suggests that businesses are preparing their workforce to meet the expected increase in new orders and production prospects for the coming year.

For the first ten months of the year, Vietnam's export turnover stands at an estimated $291.28 billion, a 7.1% decline compared to the same period last year. However, with the recent momentum observed in the past two months, HSBC predicts that export growth is likely to accelerate further, thanks to a favorable base effect in the final two months of the year.

This bodes well for a long-awaited recovery in the commercial sector and is expected to contribute to achieving a growth rate of 6-6.5% in 2024, according to the government's projection, and 6.3% as per HSBC's forecast.

This recovery is not limited to foreign trade. Following a slight improvement in domestic consumption during the third quarter, October retail sales continued to rebound, posting a 7% increase compared to the same period. Nevertheless, it remains slightly below the typical growth trend, and demand for consumer goods like cars continues to decline at double-digit rates.

Inflation has also started the fourth quarter on a positive note, with a minimal increase of 0.1% compared to September, bringing the year-on-year rate to 3.6%. This is below the Bloomberg (4.0%) and HSBC (3.9%) forecasts. HSBC believes that inflation risks are generally manageable.

HSBC's forecast suggests that inflation may rise to 4% in the fourth quarter (up from 2.9% in the third quarter) but should remain below the 4.5% ceiling. Next year, inflation is expected to hover around 3.3%. Although other countries in the region, such as Indonesia and the Philippines, are preparing to raise interest rates, HSBC doesn't anticipate the State Bank of Vietnam to follow suit, as inflation doesn't appear to be an immediate concern. Consequently, the operating interest rate may stay at 4.5%.

However, many manufacturing enterprises are feeling the pressure of inflation, as input costs and output prices are increasing at a faster pace. The inflation rate has reached an eight-month high.

The surge in oil prices is widely believed to be a contributing factor to rising input costs, affecting commodities like fuel and plastics. Additionally, the depreciation of the Vietnamese dong (VND) against the US dollar (USD) is adding further pressure to increase costs. To compensate, companies have significantly raised their selling prices.

Hanoi’s trading performance shows positive trends

In October, both exports and imports showed positive trends. Total import-export turnover is estimated at $5.09 billion, up 2.1% month-on-month and 10.1% higher than in October 2022.

During October, certain product categories had increased export turnover compared to the same period: Machinery, equipment, and spare parts rose by 5.3%; transport vehicles and spare parts saw a 12.2% increase; petroleum surged by 42.1%; agricultural products showed a 25% increase; other goods experienced a substantial 42.4% growth.

In the first 10 months of 2023, the estimated merchandise export turnover was $13.8 billion, down 1.4% from the same period in the previous year. This included the domestic economic sector, which increased by 5.8% to $7.9 billion, and the foreign direct investment sector, which declined by 9.7% to $5.9 billion.

Meanwhile, the estimated goods import turnover was $30.6 billion, down 9.5% compared to the same period in the previous year. Of these, the domestic economic sector posted a decline of 7.6% to $25.3 billion, and the foreign direct investment sector recorded a decrease of 17.9% to $5.3 billion.

Rosen Partners to develop amusement park in Hanoi

New York-headquartered firm Rosen Partners is eyeing Vietnam for a culturally respectful entertainment park.

"We are planning to invest in building a world-class entertainment park in Hanoi, to bring a renowned global brand to the capital of Vietnam," said Daniel Rosen, managing director of Rosen Partners LLC, in a meeting with Vietnamese Deputy Prime Minister Le Minh Khai on November 1.

The company develops real estate projects globally, and has recognised that Vietnam presents exceptional opportunities.

Rosen underscored the group's commitment to respecting the cultural identity of each nation it invests in, aiming to serve tourists with the utmost diligence. "We hold a profound respect for the national identity and culture of every country we operate in," Rosen added.

He also expressed confidence that the group would contribute positively to increasing tourist arrivals to Vietnam in the coming years.

"With these initial steps, we anticipate encouraging more businesses to venture into Vietnam," he added.

DPM Khai also acknowledged that Hanoi, as the political and economic hub with a rich cultural and historical heritage, is an appropriate choice for Rosen's investment.

"Vietnam welcomes foreign corporations such as Rosen Partners to invest in construction and real estate. Within the framework of Vietnamese law, the government will fully support and facilitate this venture in Hanoi," he said.

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