In its “Vietnam Macro Monitoring” report in September, the WB said the consumer price index (CPI) grew from 3 percent in August to 3.7 percent in September, continuing a sharp upward trend that started in June
Inflation was due to higher prices of food and foodstuffs as well as housing and construction materials. Additionally, the price of transport services contributed 0.3 percentage points to CPI inflation due to the new round of oil price increases registered during July-September this year.
In stark contrast, core inflation which excludes food, fuels, and government-administered prices, continued to soften from 4 percent in August to 3.8 percent in September.
Vietnam’s economy picked up in Q3 thanks to a gradual recovery of exports, however, domestic consumption remained subdued and credit growth continued to be slow, which reflects weak private domestic investment and investors’ confidence.
The WB said a strategic and well-prepared investment pipeline for 2024, and the next Medium-term Investment Plan (MTIP) with a focus on green, resilient, and regional infrastructure will help bolster long-term economic development.
The bank suggested Vietnam focus on improving the business climate and stepping up investment in human capital to attract high-tech and high-value-addition FDI as well as boost productivity in the long run.
Meanwhile, continued efforts to implement public investment could aggregate demand and economic growth in the short run.
Vietnam’s economy registered 5.3 percent year-on-year growth in Q3 compared with 4.1 percent year-on-year in Q2, due to a gradual recovery of industrial production, reflecting improvement in exports.
In the quarter, the services and agricultural sectors grew by 6.2 percent and 3.7 percent year-on-year, respectively. They contributed 2.7 and 0.4 percentage points to GDP growth in the period. The growth rates and contributions are comparable to the previous two quarters.
Following ten months of contraction, exports and imports grew 5.3 percent and 2.6 percent year-on-year in September. This is a vivid illustration of an improvement in external demand, suggesting the contraction in merchandise trade as bottomed out.
It helped narrow the contractions in exports and imports in Q3 to -1.2 percent and -5.0 percent year-on-year, respectively, compared with -12.2 percent and -20.6 percent in Q2. The improvement was evident in exports of agricultural products such as rice, textile weaving, electronics, and computers.
The overall merchandise trade balance registered a surplus of US$2.3 billion in September 2023 and US$21.4 billion for the first nine months of the year as exports have been contracting less than imports. Also, imports are recovering faster than exports, signaling businesses are expecting further expansion of production. Between April and September 2023, monthly growth rates for exports improved from -16.2 percent to 5.3 percent while those for imports improved from -23.1 percent to 2.6 percent
According to the S&P Global PMI survey for Vietnam, the number of export orders picked up in both August and September, especially from Asian markets.
Source: Saigon Giai Phong