The processing and manufacturing industry holds an important position in Hanoi's economic structure. Therefore, the municipal authorities have paid due attention to the development and expansion of this sector to create growth momentum for its gross regional domestic product (GRDP).

In the first nine months of this year, the city's index of industrial production grew by 2.6% compared to the same period last year, driven by manufacturing and processing up 2%; electricity production and distribution up 7.3%; water supply and wastewater and waste treatment up 6.1%. Meanwhile, mining went down 2%.

Remarkable hikes were seen in beverage production, machinery repair and maintenance, drug and medicinal material production, wood processing and wood product manufacturing, and food production and processing.

According to analysts, international experiences show that the processing and manufacturing industry is key to the path to development in order to create prosperity for each country.

Therefore, to promote the development of this sector, the municipal authorities need to focus on building and enhancing the capacity of industrial enterprises; developing strong firms, supply chains and value chains in the country; creating an open and favourable business and investment environment; and effectively developing service industries serving production to contribute to improving productivity and operational efficiency of the processing and manufacturing sector.

Nguyen Manh Quyen, Vice Chairman of the municipal People's Committee, said that Hanoi is focusing on developing infrastructure, including transportation infrastructure with ring roads and metro lines to connect traffic with the inner area. In addition, the capital city has developed 25 industrial parks, of which 10 are operating. For the remaining 15, investment orientations, infrastructure development, and supporting systems are being implemented to attract investment.

Hanoi is striving to complete the goal of industrialization and modernization, become a city with modern industry, and raise the proportion of processing and manufacturing to over 90% in its industrial structure by 2030.

Vietnam Airlines moves to Siem Reap Angkor International Airport

Vietnam Airlines has moved its operations to Siem Reap Angkor International Airport in Siem Reap, Cambodia, as Siem Reap Airport located in the same province was officially closed on October 16.

Siem Reap Angkor is currently the largest airport in Cambodia, capable of serving up to 7 million passengers in its initial phase. The airport is situated approximately 55km from the heart of Siem Reap province and about 40km from Angkor archaeological site, making it more convenient for travelers to reach the central area and various tourist attractions.

Vietnam Airlines has collaborated with the management unit of the Siem Reap Angkor International Airport on infrastructure and technology connectivity, including check-in systems, boarding, and other ground services, to ensure convenient and speedy experiencea for passengers.

Seminar seeks to promote sale of agricultural products via e-commerce platforms

Although e-commerce has facilitated the consumption of products, there are still many others that have not yet access to this modern business platform, especially for those from ethnic and mountainous areas, heard a seminar in Hanoi.

The seminar, which was held by Cong Thuong (Industry and Trade) Magazine, aims to promote the sale of products from ethnic minorities and mountainous areas through e-commerce platforms.

Nguyen An Son from the E-Commerce and Digital Economy Agency under the Ministry of Industry and Trade (MoIT), said that the agency has regularly organised training classes on e-commerce for people in ethnic minority areas, thereby helping raise awareness and encourage people to use e-commerce.

To develop infrastructure and support services for e-commerce, the agency has also developed solutions for electronic payment and logistics which play a key role in creating a favourable environment for businesses to successfully apply e-commerce and digital technology, he said.

It has also helped to bring hundreds of local specialties and OCOP (One Commune One Programme) products for sale on e-commerce platforms, thanks to a series of support programmes for businesses, Son added.

Hoang Thi Huyen, Head of the Online Business Department under the Vietnam Post Corporation, said that recently, Vietnam Post and Postmart have carried out campaigns to support the consumption of agricultural products.

With the support of the Ministry of Information and Communications, the MoIT, and the Ministry of Agriculture and Rural Development, agricultural products such as Bac Giang lychees, Son La plums, and Yen Chau mangoes have been sold well on the Postmart platform with volume of up to thousands of tonnes.

However, there are still many products that have not accessed this modern business platform, participants said, adding that the connection and consumption of products from ethnic minorities and mountainous areas through e-commerce platforms is only limited to promotion, and the sale value is still low. It is noteworthy that counterfeit goods still exist on these platforms, affecting the choice of buyers.

Vu Thi Le Thuy, Director of 3T Farm Cooperative, said the cooperative has regularly adopted digital platforms, especially Facebook, Zalo and fanpages.

By implementing communication work on digital platforms, the cooperative finds it easier to reach consumers, she said, adding that one of its challenges is that their cooperative members have poor knowledge about technology so they can’t exploit the advantages of digital platforms.

Son said that in the coming time, the agency will resolve difficulties related to protecting consumer rights and the issue of fake and counterfeit goods.

It will also organise training classes on e-commerce applications as well as digital technology for provinces and cities, thereby helping to raise awareness and improve skills in applying e-commerce, he added.

China Southern Airlines increases flight frequency on Guangzhou-Khanh Hoa route

China Southern Airlines has announced that it will increase the frequency of flights between Guangzhou province (China) and Khanh Hoa province, a major tourist destination in Vietnam’s southcentral coastal region, in a bid to meet the travel demand between the two countries.

At present, China Southern Airlines is running three flights a week on the Guangzhou-Khanh Hoa route on Wednesdays, Fridays, and Sundays. It is anticipated to operate a flight on the route every day as of October 29.
  
With every-day flights up and running starting this winter, China Southern Airlines expects to help travel agencies arrange tours bringing more Chinese tourists to Khanh Hoa, as well as bringing people of Khanh Hoa and neighbouring provinces to China.

China Southern Airlines earlier re-operated its air route connecting Guangzhou and Cam Ranh in Khanh Hoa on September 29 following the COVID-19 containment. The first flight brought a total of 130 Chinese travelers to the Vietnamese locality.

China Southern Airlines is the first Chinese commercial airline which has reopened flights to Khanh Hoa in the post-pandemic period.

Khanh Hoa welcomed a total of 4.25 million domestic holidaymakers and 1.45 million foreign travelers over the past nine months. It aims to receive 4.3 million domestic holidaymakers and 4.5 million foreign travelers by 2025.

Vietnam and Algeria ramp up economic cooperation in oil and gas industry

The Vietnam-Algeria Inter-governmental Committee convened its 12th meeting in Hanoi on October 16 to seek ways to enhance economic relations in oil and gas between the two countries.

Addressing the meeting, Minister of Construction Nguyen Thanh Nghi briefed the Algerian side on Vietnam’s development orientations, saying the county has been effectively implementing the "Three Strategic Breakthroughs", namely institutional reform, infrastructure development, and improvement of the quality of human resources.
  
These breakthroughs will primarily focus on innovating growth models based on science - technology and innovation, fully tapping into human resources, actively implementing digital and green transformation to achieve net zero carbon emissions by 2050, and becoming a high-income developed country by 2045, he added.

According to the minister, Algeria is Vietnam’s important partner in Africa and the fourth largest export market for Vietnamese goods in the market.

Due to the impact of the COVID-19 pandemic and other external factors, two-way trade turnover last year reached US$144.2 million, of which Vietnamese exports to Algeria hit US$141 million.

Investment in the oil and gas industry remains a bright spot in economic relations between the two countries. A joint venture on oil and gas exploration and exploitation between Vietnam Petroleum Exploration and Production Corporation (PVEP) and partners Sonatrach Algeria and PTTEP Thailand has been operating effectively and is progressing to deploy the second phase of the project.

At the meeting, the Vietnamese Minister proposed that the two sides focus on promoting linkages in other areas such as agriculture, aquaculture, including farm produce processing, consumer goods production, oil and gas, information and communication, tourism, and construction.

For his part, Algerian Minister of Industry and Pharmaceutical Production Ali Aoun emphasised that Vietnam is Algeria’s important economic partner in Asia.

He expressed his hope that both sides strive to strengthen economic exchanges, increase two-way trade turnover, and deploy new construction investment projects in the coming time.

Foreign trade value falls by 11 percent on-year in first nine months

Vietnam posted USD496.30 billion in import-export revenues in the first nine months of 2023, a fall of 11.20 percent compared to the same period last year, according to a report from the General Department of Vietnam Customs.

FDI firms continued to report the highest import-export values during the period, at USD 341.65 billion (down 11.90 percent on-year), while domestic firms reported revenues of USD154.65 billion (down 9.60 on-year).

Regarding export revenues, HCM City still led the country with USD 31.10 billion, followed by Bac Ninh Province with USD 28.66 billion, Binh Duong with USD 22.51 billion, Thai Nguyen with USD20.17 billion, and Haiphong with USD 18.10 billion.

In terms of imports, HCM City also topped the country with USD40.71 billion, followed by Hanoi with USD 26.96 billion; Bac Ninh with USD 24.11 billion, Binh Duong with USD16.05 billion, and Haiphong with USD 15.89 billion.

Fruit and vegetable exports hit a new record with USD 4.20 billion in revenues during the first nine months, surging nearly 72 percent on-year and breaking the record of USD3.81 billion in 2018, according to the Ministry of Agriculture and Rural Development.

Meanwhile, the Vietnam Vegetable and Fruit Association estimated nine-month imports at about USD1.46 billion, a fall of 0.1 percent.

Vietnam’s public debt-to-GDP ratio declines

Vietnam’s public debt-to-GDP ratio has been inching down steadily since 2018, at 37.4% of the country’s gross domestic product (GDP) as of 2022. Foreign debt accounts for 36.1% of the total, according to the Ministry of Finance.

The Government’s total borrowing in the period from 2021 to 2025 is projected to reach 42.9% of the approved plan, with direct debt service obligations totaling 53.3% of the planned amount.

Local government borrowing stood at 26.3% of the NA-approved plan, with debt service obligations at 41.1%. Both central and local governments are adhering to approved debt safety limits in the 2021-2023 period.

Government bonds issued in 2021, 2022 and 2023 have an average term of nine to 11 years, in accordance with the National Assembly’s (NA) Resolution 23/2021, with the rate of government-guaranteed debt increase lower than the prior year’s nominal GDP growth.

The ministry also highlights challenges in public investment disbursement, particularly in funds sourced from Official Development Assistance (ODA). Some investment projects have been facing delays, impacting project progress.

Vietnam is also grappling with external pressures, including rising borrowing costs and unfavorable market conditions. These factors have led to increased interest rates and have put downward pressure on the Vietnamese Dong, affecting the nation’s ability to meet its debt obligations, particularly those in U.S. dollars.

Ministries coordinate to establish fund for innovation and creativity: PM

The Prime Minister delegated the Ministry of Finance to cooperate with the Ministry of Planning and Investment to establish a fund for innovation and creativity.
 
Speaking in the second on-site inspection of the new facility of the Vietnam National Innovation Center (NIC) placed at Hoa Lac Hi-Tech Park in Hanoi on October 12, Prime Minister Pham Minh Chinh also requested the relevant units to continuously promote and expand the Vietnam Innovation network.

In his speech at the working session, Minister of Planning and Investment Nguyen Chi Dung said that the total construction capital of the new establishment of NIC is nearly VND1,000 billion (US$41 million) sourced from funding resources, and businesses at home and abroad. The NIC is expected to be developed into a regional center for innovation and creativity to attract domestic and foreign resources and promote innovative and creative activities.

Director of the NIC Vu Quoc Huy said that quite enough regulations on the organization and operation of the center have been launched. The NIC has gradually completed its apparatus and developed human resources professionals to take on a wide range of roles and responsibilities. The center's activities have been actively implemented, bringing efficiency and creating an impact on the innovative and creative ecosystem.

The center has currently expanded its relations with partners, such as Synosyps, Cadence, and Nvidia to build centers for incubation and semiconductor chip design at the NIC’s units, develop human resources in the semiconductor industry, build an innovative and creative ecosystem in the semiconductor sector, organize conferences and programs to connect domestic and foreign partners in the semiconductor industry area.

The Vietnam innovation network has 2,000 members including experts, and intellectuals at home and in 20 countries and territories around the world, and eight sub-networks in Germany, Japan, Australia, South Korea, Europe, Taiwan (China), the East Coast, and West Coast of the United States.

However, the mechanism for receiving domestic and foreign funding resources is facing difficulties. The center has not yet mobilized large resources to carry out large-scale supporting programs for innovative and creative businesses. A number of innovative and creative activities have not got enough favorable conditions for implementation. There are still challenges and obstacles in building and implementing mechanisms of trials of innovative and creative activities, establishing innovative and creative centers, and carrying out their activities in localities.

The NIC’s director proposed relevant agencies to review and build laws and general policies on innovation and creativity nationwide, and regulations related to the NIC, especially specific rules and policies in the semiconductor industry.

He suggested cooperation between the center and leading IT groups to promote innovative and creative activities in Vietnam and develop shared centers for training and research in the field of semiconductors.

In the conclusion of his speech, PM Pham Minh Chinh asked for an urgent transfer of Hoa Lac Hi-Tech Park under the management of the Ministry of Science and Technology to Hanoi’s authorities to develop the park into a center of high technology, trade and service, urban and industrial areas.

The Ministry of Transport and the People’s Committee of Hanoi need to promptly carry out an urban railway project for transport connection between the city center and the Hoa Lac satellite urban area.

The Ministry of Finance must coordinate with the Ministry of Planning and Investment to establish a fund for innovation and creativity. The relevant units need to continuously promote and expand the Vietnam innovation network.

Binh Duong needs around 12,000 workers by year-end

Enterprises in the southern province of Binh Duong are projected to recruit between 10,000-12,000 employees from now to the end of the year, with skilled and unskilled labourers accounting for about 70% of the total.

According to Pham Van Tuyen, Deputy Director of the provincial Department of Labour, Invalids, and Social Affairs, reports from some business associations and firms showed that they have secured new orders and production contracts for exports until the fourth quarter of 2023.

The worker recruitment needs in the final months of this year are primarily to supplement the shortage of human resources and, to a much lesser extent, to support the expansion of production.

Tuyen stated that the department is stepping up the organisation of job exchange platforms and providing labour advice.

It will also continue to develop a labour linkage plan with other provinces to facilitate the process of attracting workers from different regions, including those who have returned from working abroad. Additionally, there will be specific support policies to ensure job opportunities for labourers aged above 35 and migrant workers.

Quang Ninh targets more Muslim visitors to fuel tourism

Aside from resuming tourism promotion in traditional markets, the northern province of Quang Ninh is also exploring new markets, including Muslim ones, to boost the recovery of international visitors.

Quang Ninh welcomed 12.06 million tourist arrivals, including 825,000 international ones, during the first eight months of 2023, reported the provincial Tourism Department.

It is nearing this year’s tourist number target but still far behind the international arrival target of 2 million.

The Muslim tourist sources such as the Middle East, Malaysia, Indonesia, and India are believed to hold huge potential, and if the province manages to capitalise on these markets, it will be able to considerably raise the number of foreign visitors, heard a recent conference.

Halal tourism is one of the largest and fastest growing tourism subcategory in the world. However, Quang Ninh has attracted just over 450,000 Muslim tourists using accommodation services here over the last five years.

At a recent conference discussing measures for attracting Muslim tourists, experts have pointed out several reasons why Quang Ninh, boasting favourable transport infrastructure and famous destinations, has yet to become a magnet for this type of holidaymakers.

Nguyen Son Linh, Director of the Nha Linh Travel Service Co. Ltd, which has served Muslim tourists for many years, regretted that the province, home to the world natural heritage site of Ha Long Bay, hasn’t been able to attract Muslim visitors staying overnight.

He noted many of them wish to stay in Ha Long city longer to experience the heritage, but it is hard to find restaurants serving Halal food or accommodation facilities suitable for their religious practices and habits. Besides, Quang Ninh is still relatively new among Muslim travellers.

Experts and businesses added many local travel companies have just recently come to know that Muslim tourists have their own stringent standards.

Tran Van Tan Cuong, Director of the Vietnam National Halal Co. Ltd, recommended that to attract Muslim tourists, Quang Ninh should develop accommodation establishments suitable for their religious demand.

Talking about the conversion of a five-star hotel’s rooms and floors into Muslim-friendly ones, Le Thanh Tam, Managing Director of Delasea Hotel in Ha Long city, said changes need to be made from room and kitchen designs to staff training in order to quickly cater for Muslim visitors.

Most businesses expressed their interest in big opportunities from Halal tourism, but some also voiced their concern that whether the number of visitors to Quang Ninh is large enough for local restaurants, hotels, and tourist vessels to make such big changes.

Highlighting the province’s determination to capitalise on Halal tourism, Deputy Director of the Tourism Department Nguyen Huyen Anh said that in the coming time, Quang Ninh will implement all-round measures, including introducing the Muslim culture to business insiders, providing more certified Halal products, and inviting experts to train manpower for serving Muslim visitors.

The number of tourists from Muslim countries to Vietnam has increased remarkably in recent years, especially travellers from India (up 240% in September this year), according to the Vietnam National Authority of Tourism (VNAT) under the Ministry of Culture, Sports and Tourism.

Muslim tourist arrivals from Southeast Asian nations such as Singapore and Indonesia have also risen sharply.

VNAT Deputy General Director Ha Van Sieu said the Muslim markets offers promising opportunities for Vietnam's tourism industry and can be a "gold mine" that could provide a significant boost to the sector.

Social media, messaging apps enable firms to access potential customers: seminar

Many Vietnamese prefer using messaging apps for their daily activities, including shopping for essential goods, so this is an opportunity for businesses to interact with potential customers via social media platforms and messaging apps, an expert has said.

Vietnamese spend about 2 hours and 32 minutes on surfing social networks and messaging apps each day, and stay there one minute longer than the average of global users, Karla Banua, a sales and advertising specialist at Rakuten Viber, told a seminar in Ho Chi Minh City on October 16.

A 2023 survey on Viber showed that 69% of Viber users in Vietnam, mostly aged 25-50, were able to pay for the services supplied by this cross-platform messaging app, 73% of customers in the country messaged to interact with brands, and 36% shopped via chat.

Besides, 64% of online shoppers explored brands and products via social media and messaging apps, 68% preferred buying things from the brands they can conveniently communicate and directly interact with while seeking product and brand information, 78% wanted to access delivery updates, 73% wanted to switch to rivals of a brand after several negative experiences, and 82% hoped to receive businesses’ feedback on their opinions, the survey found.

Some businesses also said social networks and messaging apps are providing favourable conditions for many brands, especially startups and local small- and medium-sized enterprises, to access not only domestic but also international customers.

In reality, many Vietnamese firms have been benefiting from the solutions for interaction with potential customers via social media and messaging apps when customers are paying more attention to the interaction with local businesses and brands.

At the seminar, Rakuten Viber also introduced Viber for Business, which provides companies with various solutions for advertising, messaging, making calls, and one-time passwords (OTP).

Ho Chi Minh City promotes tourism co-operation in US

Representatives of various tourism businesses, leading airlines, and hotels in Vietnam gathered at the Vietnam - Ho Chi Minh City tourism promotion programme taking place from October 11 to October 23 in San Francisco of the United States.

Upon addressing the event, Nguyen Thi Anh Hoa, director of the Ho Chi Minh City Department of Tourism, underscored the importance of the scheme in concretising the joint statement on elevating joint ties to a comprehensive strategic partnership, with tourism being one of the top 10 priority areas for co-operation. 
  
The event has also created a wealth of opportunities to increase the number of tourists between the two countries moving forward.

Hoa affirmed that with the new visa policy, Vietnam always looks forward to welcoming the Vietnamese community and American tourists to experience the significant changes which have taken place both in Ho Chi Minh City and Vietnam as well.

She called on American tourists to choose Ho Chi Minh City as their first destination as they can pay a visit to all Vietnamese provinces and cities, as well as to other regional countries, through the southern hub.

Diverse activities have been held during the event, including a workshop introducing new Vietnamese destinations and products, tourism projects aimed at calling on American investors, as well as Business to-Business (B2B) meetings to strengthen connectivity among businesses of the two countries.

A delegation of the Ho Chi Minh City Department of Tourism is scheduled to join the IMEX America 2023 Fair taking place at Mandalay Bay resort in Las Vega from October 17 to October 19.

They are expected to host a press conference with American reporters and press in a bid to introduce and elevate the country’s image and its people as a means of attracting more American tourists back to explore Vietnam and Ho Chi Minh City moving forward.

According to the Ho Chi Minh City Department of Tourism, the US has consistently been among the top 10 Vietnamese tourism markets over recent years.

In 2019, the country welcomed about 746,000 American visitors, with Ho Chi Minh City receiving more than half a million visitors from this market.

Vietnam spends over US$1.15 bil importing liquefied petroleum gas in nine months

Vietnam spent more than US$1.15 billion on importing over 1.9 million tonnes of liquefied petroleum gas (LPG) from foreign markets, according to statistics released by the General Department of Vietnam Customs.

The figure represents an increase of 35.4% in volume but a decline of 1.4% in value compared to the same period from last year.
  
Vietnamese LPG imports throughout the reviewed period are equivalent to 97.5% of the total import volume of the entirety of last year.

The average import price reached US$601.2 per tonne, marking a drop of 27.2% against the same period from last year. September alone witnessed the country import 193,658 tonnes of LPG with a turnover of more than US$116.8 million, down 14.4% in volume and 1.3% in value. The nation mainly imports LPG from markets such as Saudi Arabia, Kuwait, and the Republic of Korea.

Vietnamese enterprises imported 69,886 tonnes of LPG worth more than US$39.4 million from the United Arab Emirates (UAE), up 48.2% in volume and 36.3% in value against the same period last year.

During the nine-month period, the nation spent more than US$246.8 million on importing 423,817 tonnes of LPG from the UAE, representing a sharp rise of 798% in volume and 753% in value.

The average import price from the UAE hovers around US$582.5 per tonne, representing a drop of 5.1% compared to the average price seen during the same period from last year.

Vietnam bolsters wooden interior furniture exports via High Point Market fair

The Viet Nam Trade Promotion Agency (VIETRADE) has co-ordinated with both domestic and foreign partners to organise a Vietnamese business delegation to participate in the High Point Market (HPM) Furniture Fair which will run in the United States from October 12 to October 18.

The occasion is part of the plan of the National Trade Promotion Program in 2023 with a view towards promoting the national image and Vietnamese brand in a bid to boost the export of Vietnamese wooden furniture and interior decoration products to the US market.
  
Participating in the occasion, the Vietnamese business delegation is at its the largest scale ever with a total of 16 businesses displaying high-quality interior and exterior products and handicrafts suitable for the US market’s tastes in a total area covering more than 460 m2.

Wood and wood products are always considered to be the nation’s key export products, making an important contribution to export turnover. For many years, the US has always been the largest consumer market for wooden furniture exports from the Vietnamese market.

According to Le Hoang Tai, deputy director of the Trade Promotion Agency, last year’s wood and wood product exports to the US reached over US$8.48 billion, duly accounting for 54.1% of the nation’s export value of wood and wood products to all markets.

Therefore, the participation of local businesses in the event aims to widely promote Vietnamese wooden furniture and interior products to the US market, thereby supporting them to further promote exports in the time ahead whilst maintaining the brand of Vietnamese wooden products in the highly lucrative market.

High Point Market fair represents the largest and most prestigious fair in the wooden interior and exterior decoration industry, with a display scale of over 900,000 m2.

State, enterprises ensure enough goods supply until Tết: MoIT

To ensure the supply of goods and stabilisation of the domestic market by the end of 2023 and Lunar New Year 2024, the Ministry of Industry and Trade (MoIT) will coordinate with large distributors to regulate the supply of goods and support the consumption of agricultural products, according to Lê Việt Nga, MoIT’s deputy director of the Domestic Market Department.

The ministry will work with the Ministry of Agriculture and Rural Development to monitor the supply and demand of essential agricultural products, focusing on livestock, vegetables, and fruits.

It also coordinates with other ministries, branches, people's committees, and relevant offices across the country to remove difficulties in circulation and distribution of goods to avoid supply chain disruptions of essential goods, especially in large cities such as Hà Nội, HCM City, and Đà Nẵng, Nga said.

MoIT will coordinate with other ministries and branches in advising on price management of state-controlled goods, including petroleum products, to contribute to controlling inflation under the Government's goals.

The ministry and relevant agencies will strengthen programmes on consumption stimulation, connection of agricultural products, and regional specialities consumption, especially commodities consumed a lot at the end of the year and the Lunar New Year, she said.

It will strengthen inspection and management of business establishments, wholesale and retail markets, and warehouses as well as selling prices to ensure supply and avoid hoarding.

In addition, the ministry also regularly organises interdisciplinary inspection teams to check the work of ensuring food safety, product quality, and listed selling prices.

The ministry requests localities, businesses, and relevant agencies to review the supply and demand of goods, and develop plans on preparing goods for Tết. They also should implement a market stabilisation programme focusing on the supply of essential foods at stable prices, and a programme to bring Vietnamese goods to rural, mountainous, and island areas.

Some localities and businesses have made plans to prepare goods and stabilise the market at the end of the year and the Lunar New Year, including Hà Nội and HCM City. Some others are developing those plans to ensure the supply of essential goods at reasonable prices.

In the first nine months of 2023, the domestic market has been relatively stable with a consistent supply of domestic goods. Purchasing power in the market has recovered well compared to previous years and the period of the COVID-19 pandemic, according to Nga.

This year, the weather has been stable and favourable for agricultural production, so the supply of food, vegetables, and fruits is abundant, and prices do not fluctuate significantly, Nga said.

She said domestic prices of essential goods are not expected to experience unusual fluctuations. This year, people, especially middle-income households, will tend to mainly spend on essential goods. So, demand during Tết is not expected to increase suddenly. Prices at the end of the year are forecast to increase according to market rules but will not rise unusually high.

Enterprises participating in the market stabilisation programme always commit to selling at stable prices, or 5-10 per cent lower than market prices. If the prices increase due to higher transportation costs and raw materials, they will report to the Department of Finance.

In the first eight months of this year, the total retail sales of goods and services reached about VNĐ4 quadrillion, an increase of 10 per cent year-on-year over the same period last year. 

WB to provide US$5-7 billion for Vietnam infrastructure projects

The World Bank (WB) is considering extending financial support ranging from US$5 billion to US$7 billion to Vietnam for the implementation of major traffic infrastructure projects over the next three years.

Minister of Transport Nguyen Van Thang met with Carolyn Turk, country director of the World Bank in Vietnam, on October 16 to discuss ongoing traffic infrastructure projects and future plans.

This meeting follows a meeting in September between the WB country director and Prime Minister Pham Minh Chinh, during which the prime minister asked the global lender to fund the development of railways, expressways, highways and other infrastructure projects in major cities over the next three years.

Minister Thang said some vital projects would require funding from the WB, including waterway corridor and logistics development projects in the south, the Bien Hoa-Dong Nai railway project, Pleiku-Quy Nhon expressway and Cam Lo-Lao Bao expressway.

Relevant authorities are expediting the completion of pre-feasibility and feasibility studies for these projects, aiming to make them available for the WB’s consideration and enable the execution of loan agreements by the end of this year.

Thang also proposed that the WB provide technical assistance to Vietnam in projects related to greenhouse gas emissions reduction in transportation and the realization of the net zero commitments made by Vietnam at the UN Climate Change Conference in Glasgow (COP26).

Turk expressed the WB’s willingness to support infrastructure development in Vietnam. She also committed to exploring additional sources of funding for the country’s technical assistance projects, aimed at promoting modernization, digital transformation, and improving the post-investment quality of infrastructure projects.

Fuel environment tax cut proposed for extension into next year

The Ministry of Finance has proposed extending the environment protection tax cut on fuel into 2024 to keep fuel prices stable.

The Ministry of Finance is seeking feedback from relevant ministries and localities on the draft resolution of the environmental protection tax on gasoline, oil, and grease for next year.

Once feedback is collected, the ministry will submit the draft resolution to the National Assembly Standing Committee for consideration. If approved, the environmental protection tax reduction will remain the same as those outlined in Resolution 30/2022, which was approved by the National Assembly Standing Committee.

The Ministry’s proposal is to cut the environmental protection tax by VND2,000 on each liter of gasoline and jet fuel, VND1,000 on each liter or kilogram of diesel oil, heavy fuel, lubricating oil, and lubricant grease, and VND600 per liter of kerosene.

After the reduction, the environmental protection tax would be VND2,000 per liter of gasoline, VND1,000 for jet fuel, diesel oil, heavy fuel oil, lubricating oil, and lubricant grease, and VND600 for kerosene.

Starting from January 1, 2025, the tax rate would be applied in accordance with Resolution 597/2018 of the National Assembly Standing Committee.

Specifically, the tax for gasoline would be VND4,000 per liter; jet fuel at VND3,000 per liter; diesel oil, heavy fuel oil and lubricating oil at VND2,000 per liter; kerosene at VND1,000 per liter; and lubricant grease at VND2,000 per liter.

The reduction of the environment protection tax is expected to keep local fuel prices stable in the year to come, thereby helping to curb inflation and ensure macroeconomic stability, as stated by the ministry. Due to the cut, tax revenue from fuel is estimated to contract by VND38,929 billion per year, said the ministry.

Interest rate cuts seen eating into banks’ profits

The chief economist of the Bank for Investment and Development of Vietnam (BIDV), Can Van Luc, has predicted the banking system may earn lower profits in 2023 than in previous years due to falling interest rates.

The State Bank of Vietnam (SBV) has lowered policy interest rates four times this year, leading to commercial banks cutting deposit and lending rates, as the economy has showed signs of attaining slower growth in the first nine months of the year, Luc was quoted by the news agency as saying.

He added the rate cuts have eroded the profitability of banks.

The BIDV Training and Research Institute has projected GDP would expand a mild 5-5.5% this year, below the National Assembly-approved target of 6.5%.

Banks have grown cautious about lowering deposit rates further for fear that depositors may withdraw cash from banks to find alternative investment avenues.

The net interest margin (NIM) in the banking system has narrowed from 3.3% in 2022 to an estimated 3% this year, resulting in an unfavorable profit outlook for banks.

Luc said that banks are increasingly focusing on digital transformation as a potential area for growth. Cutting-edge technologies like blockchain, artificial intelligence, and big data analytics are gaining traction among financial institutions.

The SBV has estimated bad debt at around 5% of total outstanding loans, up from 4.5% at the end of 2022.

Major banks like VPBank, Techcombank, and SeABank have already reported negative profit growth in the first quarter of this year.

Luc predicted that the banking sector’s profits in all of 2023 may grow at a significantly lower rate than in 2022, at 13-15%. This trend is expected to continue into the next few years.

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