return icon

Vietnam economy continues to strengthen, reports VDSC

Optimism for the year ahead has been improved to the highest thanks to the country's effective control of Covid-19 pandemic.

Strong growth on both the supply and demand sides ensures the economy strengthens into the final month of the year, according to Viet Dragon Securities Company (VDSC).

On the supply-side, industrial production registered strong growth in November (+3.9% month-on-month and +9.2% year-on-year), led by a robust growth of the manufacturing sector (+11.9% year-on-year). A 125% surge in refinery petroleum production has contributed significantly to the manufacturing growth figure.

The Vietnam Manufacturing Purchasing Managers' Index (PMI) dipped fractionally below the 50.0 no-change mark to 49.9 in November.


“However, despite this setback, optimism for the year ahead continued to improve to the highest since July 2019 as the Covid-19 pandemic remains under control,” noted the VDSC in its latest report.

On the demand-side, retail sales expanded further by 8.5% year-on-year in November from 6.1% in the prevous month. Daily consumer goods continued to see robust growth with retail sales of goods growing at 13.2% year-on-year.

Online sales during the year-end holiday season also supported the improvement of domestic consumption. Non-essential goods such as automobiles continued to register strong growth of 22.0% year-on-year in November compared to the 15% growth in October, which VDSC pointed out as a positive note.

On the other hand, other sub-sectors of the retail industry remained subdued as hospitality and tourism still recorded negative growth rates.

Trade surplus narrowed due to surging imports

In November 2020, exports continued to rise by 10.7% year-on-year, led by a strong growth of personal computers, electrical products and spare parts (+17.7% year-on-year) and machinery products (+61.8% year-on-year).

For the 11 months of 2020, exports of personal computers and related products rose strongly by 24.3% year-on-year as the world shifts to remote working. Meanwhile, relocation of manufacturing from China to Vietnam boosted exports of machinery products by 45.2% year-on-year in the January – November period. Total exports turnover during this period rose by 5.5% year-on-year to around US$254.9 billion.

November also marked the first month that imports growth surpassed exports growth in 2020. Imports increased for the fourth consecutive month by 15.7% year-on-year, led by imports of intermediate goods (+32.1% year-on-year) and capital goods (+5.2% year-on-year).

The trade surplus in November is estimated at US$754 million, the lowest level since April. A strong gain in November also lifted imports growth into positive territory (+1.7% year-on-year) and total imports turnover reached US$234.8 billion in the January – November period. The trade surplus continued to expand to US$20.1 billion for the first 11 months of 2020, nearly doubled the reported figure in the same period of last year.

Credit growth expanded faster towards year-end

As of end-Sep 2020, credit growth was up only 6.1% year-to-date due to weak borrowing demand triggered by the pandemic. However, there has been a significant improvement in lending activities during the past two months. According to the State Bank of Vietnam (SBV), credit growth has accelerated to 8.5% year-to-date as of Nov 27, 2020, bringing total loans to VND8,900 trillion (US$384.7 billion).

Regarding to the result of  Circular 01/2020/TT-NHNN, as of November 9, credit institutions have rescheduled the repayment terms for more than 272,183 customers with a loan balance of VND341.8 trillion (US$14.77 billion), equivalent to 3.8% of total loans. In addition, credit institutions also exempted/reduced interest payment for 552,725 customers with a loan balance of VND931 trillion (US$40.24 billion). New lending with preferential interest rates was estimated at VND2,018 trillion (US$87.23 billion), or 23% of total loans.

Despite of a faster-than-expected recovery in credit demand, liquidity conditions remained ample, stated the VDSC.

In the interbank market, the overnight rate stayed at 0.1% in November. Meanwhile, government bond yields continued to decline. Yields on bonds with a 5-year maturity dropped 14 basic points while yields on bonds with tenors of 10 years and 15 years declined by 15 and 19 basic points, respectively.

The yield spread between the 2-year and 10-year tenors narrowed from 221 to 207 basic points during November.

Due to an acceleration of credit growth in recent months, Vietnam’s credit growth for the whole year is estimated to be around 10% year-on-year, which is lower than an increase of 13.6% in 2019, stated the VDSC.

“A strong recovery of credit demand will help to mitigate risks of rising bad debts for Vietnam’s banking system,” it noted. Hanoitimes

Hai Yen


Vietnamese couple help German bicyclist in distress

Trung and Nhung, a Vietnamese couple, on the way to travel across Vietnam on Tet holiday, saw a foreigner who was facing troubles because of strong winds in Ninh Thuan.

Vietnam develops green agriculture to increase exports to EU

Vietnam is paying attention to mobilising resources to invest in developing green agriculture with an aim to raising the market share of its agricultural exports to the European Union.

Vietnamese team comes first at Southeast Asian Fencing Championship

Vietnam secured the first position at the 2023 Southeast Asian Fencing Championship which has taken place recently in Malaysia.

2023 - Time for Edtech to thrive in Vietnam

Experts are positive about the development of Vietnam’s education technology (Edtech) market in 2023 if local Edtech companies can overcome post-pandemic challenges.

UK imports from Vietnam in 2022 put at over US$6 billion

United Kingdom (UK) imports from Vietnam amounted to US$6.06 billion last year, rising by 5.2% over 2021, according to the General Department of Vietnam Customs.

Five more registration officials in Hanoi prosecuted for soliciting bribes

Police of Hanoi’s Thuong Tin District has started legal proceedings against five officials at 2915D Registration Centre for taking bribes.

Thai Thi Lien, Vietnam's matriarch pianist and pedagogue, passes away

Thai Thi Lien, one of the founders of Vietnam's National Academy of Music, passed away on Tuesday peacefully at her home at the age of 106, her son Tran Thanh Binh said.

VN striker Tien Linh vies for Asia’s Best Footballer Award 2022

Vietnamese striker Nguyen Tien Linh has been listed among the 25 nominees for the Best Footballer in Asia 2022 award organized by Titan Sports of China.

Visa policy change needed to further attract foreign visitors: tourism authority

A key for Vietnam to attract more foreign tourists at this time is to change its visa policy, said Chris Farewell, a member of the Tourism Advisory Board (TAB).

Da Nang promotes food into unique tourism product

Not only famous for its beautiful natural landscapes, bridges and diverse cultural heritage as well as hospitality of the locals, the central coastal city of Da Nang boasts rich food known to world tourists for its unique taste.

Vietnamese films earn big profits during Tet

Nha Ba Nu (The House of No Man) has been the highest-grossing Vietnamese film during the Tet (Lunar New Year) holiday.

PM to hold dialogue with young people in March

Prime Minister Pham Minh Chinh will hold a dialogue with young people in Hanoi on March 26, the Government Office has announced.

Internet slows as four out of five submarine cables suffer disruptions

Vietnamese internet service providers have confirmed that four out of five submarine internet cables that connect the country to the world are experiencing issues, seriously affecting performance and reliability.

Politburo Resolution 31 gives momentum to HCM City to 'take off'

Experts say that policies from the Politburo’s Resolution 31 will give momentum to HCM City to grow strongly, but also pose big challenges for the city.

Billionaire's companies make big profits during difficult period

The businesses owned by the dollar billionaire Pham Nhat Vuong have all reported record-high revenue at a time when the real estate market has been bogged down in difficulty.