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Vietnam’s economic overview (1H2022)

Vietnam’s economic overview (1H2022)

Thursday 30, 06 2022
Vietnam’s GDP in the second quarter was estimated to increase by 7.72% over the same period last year, higher than the averge growth rate for the second quarter during the period of 2011-2021. In the first 6 months of 2022, GDP growth rate increased by 6.42%.

Covid 19

1. GPD growth rate

GDP in the second quarter of 2022 was estimated to increase by 7.72% over the same period last year, higher than the averge growth rate for the second quarter during the period of 2011-2021. GDP in the first 6 months of 2022 increased by 6.42%, higher than the growth rate of 2.04% in the first 6 months of 2020 and 5.74% in the first 6 months of 2021 but lower than the growth rate of 7.28 % and 6.98% of the same period in 2018 and 2019.

The agriculture, forestry and fishery experienced a growth of 2.78% (contributing 5.07%) while the industrial and construction sector increased by 7.70%, (contributing 48.33%). Specifically, the processing and manufacturing industry was the growth driver of the whole economy with a growth rate of 9.66% and the service sector increased by 6.60% (contributing 46.60%).

GDP

Regarding the structure of the economy in the first 6 months of 2022, the agriculture, forestry and fishery sector accounted for 11.05%; industrial and construction sector accounted for 39.30%; service sector accounted for 40.63%; product tax minus product subsidies accounted for 9.02%.

In terms of GDP use in the same period, final consumption increased by 6.06% over the same period in 2021; accumulated assets increased by 3.92%; exports of goods and services increased by 9.10%; imports of goods and services increased by 4.41%.

2. Agricultural, forestry and fishery production

a) Agriculture

The cultivated area of the winter-spring rice crop reached 2,992 thousand hectares, equaling 99.5% of last year’s crop. Rice yield was estimated at 66.7 quintals/ha, down 1.9 quintals/ha while output was estimated at 19.97 million tons, down 661.3 thousand tons. Moreover, 1,829.5 thousand hectares of summer-autumn rice crop have been sown, equaling 99.5% of the same period last year.

As for annual crops, as of mid-June 2022, the cultivation area of vegetable and bean was 740.7 thousand ha, up 0.4% over the same period last year. However, the area of maize, groundnut, soybean and sweet potato continued to decrease over the same period last year mainly due to low economic efficiency.

Agriculture

The total area of existing perennial plants was estimated at 3,690.4 thousand hectares, up 1.4% over the same period in 2021, of which the erea of industrial plants was 2,206.9 thousand hectares, an increase of 0 ,8% while that of fruit trees reached 1,177.5 thousand ha, up 2.2%. The output of some perennial industrial crops and fruit trees has increased.

Pig and poultry production has been recovering due to the disease being well controlled. As of the end of June 2022, the total number of pigs was estimated to increase by 3.8% compared to the same period in 2021; that of poultry increasedby 1.2%; the total number of cows increased by 2.2%; the total number of buffaloes decreased by 1.4%.

b) Forestry

The area of planted forest in the first 6 months of 2022 was estimated at 119.4 thousand ha, up 3.1% over the same period last year. The number of forestry trees reached nearly 47 million trees, up 6%. Firewood production reached 9.5 million steres, up 0.6%. Timber production reached 8,488.2 thousand m3, up 5.9%. The increase in logging activities in the first 6 months of 2022 was resulted from the increased demand for wood production, processing and export. In addition, due to the high price of petrol and high transportation costs, wood processing enterprises have actively sought domestic raw materials, thereby promoting the development of timber exploitation.

Forestry

Regarding forest damage, in the first 6 months of 2022, there were 588 ha of damaged forest area, down 24.9% over the same period last year.

c) Fishery

Aquaculture grew well due to increased consumer demand and export prices. However, marine fishing output decreased due to high gasoline prices and many fishing boats had tolay ashore. Fishery output in the second quarter of 2022 was estimated at 2,333.3 thousand tons, up 2.9% over the same period last year.

Fishery

Generally, in the first 6 months of 2022, fishery production was estimated at 4,196.8 thousand tons, up 2.5% over the same period last year. In particular, fish production reached 3,044.4 thousand tons, up 1.7%; shrimp production reached 520 thousand tons, up 9.4%; production of other aquatic products reached 632.4 thousand tons, up 1.2%.

3. Industrial production

The added value of the industrial section in the first 6 months of 2022 was estimated to increase by 8.48% over the same period last. In particular, the processing and manufacturing industry increased by 9.66%, contributing 2.58 percentage points to the increase in total value added of the whole economy.

The index of industrial production (IIP) in the first 6 months of 2022 of some key industries increased sharply compared to the same period last year. Specifically, apparel manufacturing increased by 23.3%; production of electrical equipment increased by 22.2%; production of drugs, pharmaceutical chemicals and herbal ingredients increased by 17.5%; production of leather and related products increased by 13.1%; production of prefabricated metal products (except for machinery and equipment) increased by 11.4%; mining metal ores, manufacturing electronic products, computers and optical products all increased by 11.2%.

Industrial production

Consumption index of the processing and manufacturing industry in the first 6 months of 2022 increased by 9.4% over the same period in 2021.

As of June 30, 2022, the inventory index of the processing and manufacturing industry increased by 6.1% compared to the same period last month and increased by 14.1% over the same period last year. The average inventory rate of the entire processing and manufacturing

The number of employees working in industrial enterprises increased by 1.3% compared to the same period last month and increased by 5.8% over the same period last year.

4. Business activities

a) Business registration

In June, there were nearly 13.3 thousand newly established enterprises, down 0.7% compared to the previous month and up 17.3% over the same period last year. There were also nearly 2.3 thousand enterprises returning to operation, down 56.7% over the previous month and down 53.7% over the same period last year. More than 5,000 enterprises registered to suspend business for a definite time, up 3.3% and 32.6 and 5,148 enterprises stopped operation and are waiting for dissolution procedures.

Generally in the first 6 months of 2022, there were 76.2 thousand newly established enterprises, up 13.6% over the same period last year. Nearly 40.7 thousand enterprises returned to operation, up 55.6%; 50.9 thousand enterprises suspended business for a definite time, up 43.0%; nearly 24.1 thousand enterprises stopped operating and waited for dissolution procedures, down 2.4%; 8.6 thousand enterprises completed dissolution procedures, down 13.6%. On average, 19.5 thousand enterprises were established and returned to operation and 13.9 thousand enterprises withdraw from the market every month.

Business registration

b) Business trends of enterprises in the processing and manufacturing industry

The survey results in the second quarter of 2022 showed that 78.4% of enterprises believed their production and business situation was stable and better than in the first quarter of 2022 while 21.6% of enterprises said that they were facing difficulties.

Forecast for the third quarter of 2022, 85.0% of enterprises thought the trend would be stable and better compared to the second quarter of 2022 whereas 15.0% of enterprises expected more difficulties.

5. Service activities

a) Retail sales of consumer goods and services

Total retail sales of consumer goods and services in June 2022 was estimated at VND 471.8 trillion, up 1.4% over the previous month and 27.3% over the same period last year. The figure for the second quarter of 2022 was estimated at VND 1,395.1 trillion, up 5.5% compared to the previous quarter and 19.5% over the same period last year. For the first 6 months of the year, the total retails sales of consumer goods and services was estimated at VND 2,717 trillion, up 11.7% over the same period last year.

Retail sales

b) Transport of passengers and goods

In June, passenger transport recovered strongly with the number of passengers increasing by 80.1% due to the high increase in travel and tourism demand. Cargo transportation continued to develop positively with a growth rate of 29% in terms of transportation and 36.3% in turnover compared to the same period last year. Generally in the first 6 months of 2022, passenger transport increased by 6.2% over the same period last year and freight transportation increased by 8.6%.

c) Telecommunications

Revenue of telecommunications in the second quarter of 2022 was estimated at VND 84.4 trillion, up 7.8% over the same period last year. Generally, in the first 6 months of 2022, telecommunications revenue was estimated at VND 168.4 trillion, up 6.6% over the same period last year.

Transport, telecommunication

6. Banking, insurance, stock market activities

As of June 20, 2022, the total means of payment increased by 3.3% compared to the end of 2021; capital mobilization by credit institutions increased by 3.97%; credit growth of the economy reached 8.51%.

The insurance market maintained a stable growth rate as the premium revenue of the entire insurance market in the first 6 months was estimated to increase by 14% over the same period last year.

On the stock market, as of June 27, 2022, the VNIndex reached 1,202.82 points, down 7% compared to the end of last month and down 19.7% compared to the end of 2021. As of mid-June 2022, the stock market capitalization reached VND 6,339 trillion, down 18.4% compared to the end of 2021. Average trading value reached VND 19,563 billion/session, up 10% compared to the previous month. Generally, in the first 6 months of 2022, the average transaction value reached VND 26,649 billion/session, up 0.2% compared to the previous year's average.

On the bond market, as of June 15, 2022, the average trading value reached VND 7,718 billion/session, down 0.9% from the previous month. In general, in the first 6 months of 2022, the average transaction value reached VND 10,986 billion/session, down 3.7% compared to the average in 2021.

7. Investment

Investment capital realized from the State budget in the first 6 months of the year was estimated at VND 192.2 trillion, equaling 35.3% of the year plan and increasing by 10.1% over the same period last year.

As of June 20, 2022, the total foreign investment capital registered in Vietnam, including newly registered capital, adjusted registered capital and capital contribution and share purchase by foreign investors, reached nearly USD 14.03 billion, down 8.1% over the same period last year.

Investment

Realized foreign direct investment in Vietnam in the first 6 months of 2022 was estimated at USD 10.06 billion, up 8.9% over the same period last year. This is the highest increase in the first 6 months of the year over the past 5 years.

8. Import and export of goods and services

a) Export and import of goods

- Exports of goods

Export turnover of goods in June 2022 was estimated at USD 32.65 billion, up 5.6% over the previous month. The figure for the second quarter of 2022 was estimated at USD 96.8 billion, up 21% over the same period last year and 8.7% compared to the first quarter of 2022. The total export turnover for the first 6 months was estimated at USD 185.94 billion, up 17.3% over the same period last year.

Regarding the structure of goods export in the first 6 months of 2022, processed industrial products accounted for the highest proportion with 88.7%.

- Imports of goods

Import turnover of goods in June 2022 was estimated at USD 32.37 billion, down 0.8% compared to the previous month. The figure for the second quarter of 2022 was estimated at USD 97.6 billion, up 15.7% over the same period last year and up 11.3% compared to the first quarter of 2022. In the first 6 months, the total import turnover of goods was estimated at USD 18523 billion, up 15.5% over the same period last year.

As for the structure of imported goods in the first 6 months of 2022, capital goods accounted for the highest proportion with 94%.

Import & Export

- Export and import markets of goods

In the first 6 months of 2022, the United States was the largest export market of Vietnam with an estimated turnover of USD 55.9 billion. China was Vietnam's largest import market with an estimated turnover of USD 61.3 billion.

– Trade balance

In May, there was a trade deficit of USD 1.7 billion USD, and in the first 5 months of the year, there was a trade surplus of USD 434 million. It is estimated that there would be a trade surplus of USD 276 million in June. In the first 6 months of 2022, the trade balance of goods is estimated to have a trade surplus of USD 710 million.

b) Export and import of services

Service export turnover in the first 6 months of 2022 is estimated at USD 4.3 billion, up 81.8% over the same period in 2021. Service import turnover in the first 6 months of 2022 is estimated at USD 12.3 billion, up 22.3%. Such figures show that there would be a service trade deficit in the first 6 months of 2022 of USD 8 billion.

9. Price Index

a) Consumer price index, gold price index and US dollar price index

Consumer price index (CPI) in June 2022 increased by 0.69% over the previous month, by 3.18% compared to December 2021 and by 3.37% over the same period last year. In the second quarter of 2022, CPI increased by 2.96% compared to the second quarter of 2021. On average, in the first 6 months, CPI increased by 2.44% over the same period last year. Core inflation increased by 1.25%.

Gold price index in June 2022 decreased by 1.14% compared to the previous month, by increase of 7.4% over the same period in 2021. For the first 6 months of 2022, gold price index increase by 6.63%.

US dollar price index in June 2022 increased by 0.72% over the previous month and by 1.23% over the same period in 2021. Generally for in the first 6 months of the year, this index decreased by 0.2%.

b) Producer price index

Producer price index of agricultural, forestry and fishery products in the second quarter of 2022 increased by 1.84% compared to the previous quarter and by 2.18% over the same period last year. The figure for the first 6 months increased by 1.38% over the same period last year.

Producer price index of industrial products in the second quarter of 2022 increased by 2.1% compared to the previous quarter and by 5.11% over the same period last year; 6 months increased by 4.75%.

Service producer price index in the second quarter of 2022 increased by 1.25% compared to the previous quarter and by 3.57% over the same period last year. The figure for the first 6 months increased by 2.83%.

Price index of raw materials, fuel and materials used for production in the second quarter of 2022 increased by 2.23% compared to the previous quarter and by 6.38% over the same period last year. The figure for the first 6 months increased by 6.04%.

Source: GSO

Compiled by VietnamCredit

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Vietnam Economy

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