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Top 9 highlights of Vietnam’s economy in 2022

Top 9 highlights of Vietnam’s economy in 2022

Monday 02, 01 2023
In 2022, it is clear that import and export turnover has set a record while the policy of increasing wages improves people's lives. However, the downsides also exist, which are reflected in the freezing of the real estate market, the collapse of corporate bonds, and the plunge of stocks.

1. Import and export turnover exceeded USD 700 billion

As of mid-December 2022, Vietnam's import-export turnover officially reached USD 700 billion, and it is estimated to reach USD 730 billion for the whole year. This is an all-time record high in Vietnam's trade activities, demonstrating the continuous efforts of the Government, ministries, sectors, localities and the business community in recent years, as well as affirming Vietnam's role in the global supply chain of goods. Especially, for the first time, Vietnam's goods export to the US reached over USD 100 billion (accounting for nearly 30% of export turnover).

Vietnamcredit Import and export turnover exceeded USD 700 billion

In addition, commodity groups including phones and components; computers, electronic products and components; machinery, equipment, tools, spare parts also had an impressive growth. Specifically, there are 35 items with export value of over USD 1 billion and 8 items exceeding USD 10 billion. The year 2022 has seen a big win for the agricultural industry when the export turnover of this sector reaches over USD 53 billion, far exceeding the target assigned by the Government.

According to the ranking of the World Trade Organization, Vietnam is continuously in the group of 30 countries and territories with the largest import and export value in the world. In the ASEAN region, Vietnam's import and export turnover rose to second place, after Singapore.

2. Wage increase

In 2022, on the basis of the recommendation of the National Wage Council, the Government issued Decree 38/2022 on increasing the regional minimum wage from July 1, 2022 after 2 years of not increasing due to the impact of the COVID-19 epidemic. Salary increased by 6% on average compared to 2020, and for the first time there was a minimum hourly wage for each region.

Vietnamcredit Wage increase

From January 1, 2022, pensions and social insurance benefits was also increased by 7.4% according to Decree 108/2021/ND-CP of the Government. In addition to the general increase, those receiving pensions from VND 2.3-2.5 million/month may receive VND 2.5 million/month; pensions under USD 2.3 million/month were increased by VND 200,000/month.

In November 2022, the National Assembly also passed Resolution 69/2022/QH15, which included a decision to increase the base salary from VND 1.49 million/month to VND 1.8 million/month from July 1, 2023.

3. Re-open international flight routes

From March 15, 2022, Vietnam officially restored the international aviation market, completely removed all barriers for disease control, and opened its borders. During the year, the domestic aviation market grew far beyond the target, even surpassing the pre-epidemic period (in 2019); However, the number of international passengers has not met expectations but also experienced a good recovery.

According to the Civil Aviation Authority of Vietnam (CAAV), in 2022, Vietnam's air passenger market may reach 55 million, up 3.7 times compared to 2021 and equal to 69.6% of 2019. In particular, domestic passengers reached more than 43.2 million arrivals, an increase of 3.5 times compared to 2021 and an increase of 15.6% compared to 2019; International passenger arrivals reached 11 million, an increase of 22 times compared to 2021 and equal to 27% of 2019. To date, Vietnam has restored most of the regular international passenger flight routes to other countries, including the Chinese market.

Vietnamcredit Re-open international flight routes

According to the Ministry of Culture, Sports and Tourism, in 2022, Vietnam has welcomed and served more than 100 million tourists, an increase of 2.6 times over the same period in 2021. Specifically, there have been 3.5 million international visitors (the target is 5 million visitors); 101.3 million domestic visitors, an increase of over 19% compared to 2019. Total revenue from tourists is estimated at nearly VND 500,000 billion.

4. Corporate bonds collapse - Real estate market frozen

The year 2022 revealed many dark spots of the corporate bond issuance that flourished many years ago when a series of businesses mobilized trillions of dong of bonds but used bond capital for the wrong purposes such as Tan Hoang Minh and Van Thinh Phat. Many other problems such as bonds issued without guarantee, no collateral, no credit rating have been revealed. Meanwhile, the volume of matured bonds was up to VND 144,500 billion (of which the volume of real estate bonds accounted for 43.2%). The Ministry of Finance has also issued an amended Decree 65 to tighten the bond market.

Vietnamcredit Corporate bonds collapse - Real estate market frozen

2022 is also a tumultuous year for the real estate industry. The real estate market at the end of the year suffered a blow when credit "room" was exhausted while capital from bond issuance was blocked. Meanwhile, real estate prices increased abnormally.

Real estate prices in 2022 increased by 30% compared to 2021 and 50% compared to 2019. Besides, the limited supply of real estate causes an imbalance between supply and demand, which pushes up the price of real estate for sale and for rent. The absorption rate is reduced, few products are suitable for real demand.

5. The plunge of stocks

Vietnam's stock market experienced a turbulent year in 2022. VN-Index once surpassed 1,500 points, but so far it has decreased by about 30% compared to the end of 2021, sometimes reached the bottom of 874 points. Liquidity also fell sharply. Psychological factors dominated the market, with negative information about stock market manipulation (in FLC, Louis group). However, the market still recorded a bright spot, maintaining its attraction to domestic and foreign investors.

Vietnamcredit The plunge of stocks

In the first 11 months of 2022, domestic individuals opened nearly 2.5 million new securities accounts, far exceeding the figures of the last 4 years combined. Foreign capital massively returned to the market in the last 2 months of the year. Investor confidence was strengthened, with amendments to proprietary trading data disclosure, ceiling/exchange requirements for 5 consecutive sessions, change in calculation method of settlement price of derivatives, etc.

In 2022, shocking cases related to a series of famous businessmen involved in fraud and manipulation of the stock market, including: Mr. Trinh Van Quyet - former Chairman of FLC Group; Mr. Do Anh Dung - Chairman of Tan Hoang Minh Group; Ms. Truong My Lan - Chairman of the Board of Directors of Van Thinh Phat Group Joint Stock Company; Do Thanh Nhan - Chairman of the Board of Directors of Louis Holdings Joint Stock Company.

6. Fluctuation in bank interest rates

In 2022, the banking sector witnessed fluctuations in interest rates. Deposit and lending interest rates have reached the highest level in nearly a decade. There was a race in deposit interest rate among banks. Some banks even had a deposit interest rate of up to 12.5%. Faced with this fact, the State Bank blew the whistle and banks agreed to reduce the deposit interest rate at the highest level of 9.5% for a 6-month term. However, the market is not easy to follow purely administrative orders.

Vietnamcredit Fluctuation in bank interest rates

Although the credit growth in 2022 has been agreed at 14%, under the direction of the Prime Minister to finance the economy, in the last month of 2022, the State Bank has extended the credit room by 1,5-2%. This situational solution is considered as timely capital support for enterprises to invest in production and business in the last days of the year.

7. Gold prices remain stable

In 2022, the gold market was almost "quiet". The domestic gold price no longer jumped above VND 70 million/tael but stayed around VND 66-68 million/tael. The domestic gold price was always higher than the world gold price. Sometimes this gap was up to VND 20 million/tael. Along with that, the difference in the price of gold buying - selling always reached about VND 1 million/tael. The above factors have contributed to making investors less interested in gold in 2022.

Vietnamcredit Gold prices remain stable

In contrast to gold, the money market and the USD exchange rate saw many changes. Under the impact of the US Federal Reserve (Fed) continuously raising interest rates, the State Bank of Vietnam has repeatedly adjusted interest rates. In 2022, the USD exchange rate has increased by about 9%. On the free market, the price of USD sometimes exceeded VND 25,000/USD. To support commercial banks in USD liquidity, the State Bank sold about USD 21 billion.

8. Oil supply disruption

In 2022, Vietnam's oil and petroleum market faced different fluctuations when a series of petrol stations closed and stopped selling. Many petroleum importers and distributors had their licenses withdrawn after being found to have many violations.

The turmoil in licensing and petroleum trading revealed weaknesses that had a great impact on people's lives and businesses across the country when the supply disruption lasted for many months. Violations in the supply and storage of petroleum as well as inadequacies related to costs and discounts for petroleum enterprises were also revealed.

Vietnamcredit Oil supply disruption

The prolonged supply tension led the Government to ask the Ministry of Industry and Trade and the Ministry of Finance to focus on fixing the problems in petroleum business by amending Decree 95 and implementing a series of measures to ensure the supply security.

9. Breakthrough in transport infrastructure

In 2022, a series of national key traffic projects were approved for investment. By the end of 2022 and early 2023, many bidding packages for the construction of 12 sections of the North-South Expressway Project in the period of 2021-2025 (phase 2) will be started, with the goal of completing in 2025. The project has a total investment of nearly VND 147,000 billion, from the state budget.

Vietnamcredit Breakthrough in transport infrastructure

The Ministry of Transport is also responsible for supervising the construction progress of Long Thanh International Airport (Dong Nai), Terminal T3 Project at Tan Son Nhat Airport. This Ministry is also assigned to support 14 localities that are decentralized as investors in 7 public investment highway projects from the socio-economic recovery and development program.

Source: cafebiz

Compiled by VietnamCredit

Tag: vietnam economy; economic overview; economic highlights; import & export turnover; aviation industr; corporate bonds; real estate; stock market; interest rates; gold price; exchange rate

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Vietnam Economy

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