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Vietnam’s economic overview (1Q2022)

Vietnam’s economic overview (1Q2022)

Thursday 31, 03 2022
Business registration has prospered in the first quarter of 2022. The number of newly established enterprises and enterprises returning to operation in the first quarter of 2022 increased by 36.7% over the same period last year. In addition, enterprises are optimistic about their production and business situation in the second quarter of 2022.

Covid 19

1. GDP growth

Vietnam’s gross domestic product (GDP) in the first quarter of 2022 was estimated to increase by 5.03% over the same period last year. In particular, the agriculture, forestry and fishery sector increased by 2.45%, contributing 5.76% to the overall growth; the industrial and construction sector increased by 6.38%, contributing 51.08%; the service sector increased by 4.58%, contributing 43.16%.

GDP

In the field of agriculture, forestry and fishery, the yield of winter rice in the Mekong Delta increased significantly (by 7.4 quintals/ha) compared to the previous year's crop. The livestock sector is gradually recovering while the output of live meat for slaughter increased compared to the same period last year. Wood processing and export experienced many positive results. Aquaculture has developed stably as the prices of farmed pangasius and shrimp were high due to the strong increase in export demand. The added value of the agricultural sector in the first quarter of 2022 increased by 2.35% over the same period last year, contributing 0.22 percentage points to the increase in total added value of the whole economy.

The industrial section grew by 7.07% over the same period last year. The processing and manufacturing industry continued to play a leading role in the growth of the economy with an increase of 7.79%, contributing 2.05 percentage points. Mining industry grew positively by 1.23% (coal mining increased by 3.2% and metal ore increased by 5%). The construction industry grew by 2.57%, lower than the 6.53% growth rate of the first quarter of 2021, contributing 0.16 percentage points.

In the first quarter of 2022, the service sector prospered when many service activities were active again. Financial, banking and insurance activities saw a 9.75% growth over the same period last year, contributing 0.54 percentage points; transportation and warehousing increased by 7.06%, contributing 0.43 percentage points; wholesale and retail increased by 2.98%, contributing 0.31 percentage points; accommodation and catering services decreased by 1.79%, contributing -0.04 percentage points.

Regarding the structure of the economy in the first quarter of 2022, the agriculture, forestry and fishery sector accounted for 10.94%; industrial and construction sector accounted for 37.97%; service sector accounted for 41.70%; product tax minus product subsidies accounted for 9.39%.

As for GDP use in the first quarter of 2022, final consumption increased by 4.28% over the same period last year; accumulated assets increased by 3.22%; exports of goods and services increased by 5.08%; imports of goods and services increased by 4.20%.

AgricultureForestryFishery

2. Industrial production

The index of industrial production in the first quarter of 2022 was estimated to increase by 7.07% over the same period last year. In partiuclar, the processing and manufacturing industry increased by 7.79%, contributing 2.05 percentage points to the overall growth of the whole economy; electricity production and distribution increased by 7.42%, contributing 0.29 percentage points; water supply, waste and wastewater management and treatment activities increased by 6.54%, contributing 0.04 percentage points; the mining industry increased by 1.23%, contributing 0.04 percentage points.

Consumption index of the processing and manufacturing industry in March 2022 increased by 19.1% over the previous month and 7.6% over the same period last year. In the first quarter of 2022, the consumption index of this industry increased by 6.6% over the same period in 2021.

As of March 31, the inventory index of the processing and manufacturing industry was estimated to increase by 4.8% over the same period last month and by 17.7% over the same period last year. The average inventory rate of the processing and manufacturing industry in the first quarter of 2022 was 79.9%.

Industrial production

3. Business registration

In March, there were 14.3 thousand newly established enterprises with a total registered capital of 193.6 trillion VND. The number of registered employees was 93.8 thousand employees. Such figures mean that there was an increase of 96.3% in the number of enterprises, an increase of 127.3% in the registered capital and 29.2% in number of employees compared to February 2022. Compared to the same period last year, there was an increase of 28% in the number of enterprises, an increase of 71.3% in the registered capital and an increase of 28.8% in the number of employees. The average registered capital of a newly established enterprise in this motnh was 13.5 billion VND, up 15.8% over the previous month and 33.8% over the same period last year. Besides, there were 4.3 thousand enterprises returning to operation, up 5.6% over the previous month and down 5.1% over the same period in 2021.

Generally, in the first quarter of 2022, there were nearly 34.6 thousand newly registered enterprises with a total registered capital of 471.2 trillion VND and a total number of registered employees of nearly 243.5 thousand - an increase of 18.1% in the number of enterprises, an increase of 5.2% in the registered capital and a decrease of 0.9% in the number of employees over the same period last year. The average registered capital of a newly established enterprise in the first 3 months of 2022 reached 13.6 billion VND, down 10.9% compared to the same period in 2021. On average, 20,000 new businesses were established and re-operated per month.

In the same period, the number of enterprises suspending business for a definite term was 35.7 thousand, an increase of 49.7% over the same period last year; 11.3 thousand enterprises stopped operating and waited for dissolution procedures, up 0.1%; more than 4.3 thousand enterprises completed dissolution procedures, down 16.7%. On average, 17.1 thousand businesses withdrew from the market every month.

Business registration

4. Investment

Realized social investment capital in the first quarter of 2022 at current prices was estimated at 562.2 trillion VND, up 8.9% over the same period last year.

As of March 20, 2022, the total foreign investment capital registered in Vietnam, including newly registered capital, adjusted registered capital, capital contribution and share purchase by foreign investors reached 8.91 billion USD, down 12.1% over the same period last year

Realized foreign direct investment in Vietnam in the first three months of 2022 was estimated at 4.42 billion USD, up 7.8% over the same period last year. This is the highest level of foreign direct investment in the past 5 years.

There were 24 projects of Vietnamese investors granted investment certificates in foreign countries. The total capital contributed by these investors was 180.2 million USD, up 28.5% over the same period last year.

Investment

5. Retail sales of consumer goods and services

Total retail sales of consumer goods and services in March 2022 were estimated at 438 trillion VND, increasing by 2.9% over the previous month and 9.4% over the same period last year. In the first quarter of 2022, the total retail sales of consumer goods and services were estimated at 1,318 trillion VND, up 4.4% over the same period last year.

In March 2022, passenger transport service served approximately 241.5 million passengers, down 1.7% compared to the previous month. Generally, in the first quarter of this year, there were 740.8 million passengers, a decrease of 23.6% over the same period last year.

Regarding cargo transport in March 2022, about 167.5 million tons of good were transported, up 4.8% over the previous month. Generally in the first quarter of 2022, cargo  transport reached 501.8 million tons, an increase of 8.2% over the same period last year.

Telecommunications activities in the first quarter of 2022 were generally stable with estimated revenue of 83.8 trillion VND, up 5.1% over the same period last year.

The number of international visitors to Vietnam in March reached 41.7 thousand arrivals, up 41.4% over the previous month and 2.2 times higher than the same period last year. Generally, in the first quarter of 2022, the number of international visitors was estimated at nearly 91,000 arrivals, an increase of 89.1% over the same period last year.

Retail sales

6. Finance and banking

As of March 21, 2022, the total means of payment increased by 2.49% compared to the end of 2021; capital mobilization by credit institutions increased by 2.15%; and credit growth of the economy reached 4.03%.

In the first months of 2022, in the context of the complicated developments of the Covid-19 epidemic, the insurance market still maintained a stable growth rate. Premium revenue of the entire insurance market in the first quarter of 2022 was estimated to increase by 13% over the same period last year, of which premium revenue from the life insurance sector increased by 15%, and that of the non-life insurance sector increased by 9%.

The recovery of every economic sector positively impacted the operation of the stock market. In the stock market, the average trading value of the first quarter of 2022 reached 31,409 billion VND/session, up 18.1% compared to the average of the previous year.

7. Imports & exports of goods and services

a) Imports & exports of goods

Realized export turnover of goods in February 2022 is estimated at 23.42 billion USD, which is 470 million USD higher than the estimate. It is estimated that in March 2022, export turnover of goods may reach 34.06 billion USD, up 45.5% over the previous month and up 14.8% over the same period last year. Export turnover of goods in the first quarter of 2022 is estimated at 88.58 billion USD, up 12.9% over the same period last year.

Regarding the structure of goods export in the first quarter of 2022, fuel and mineral products accounted for 1.4%, up 0.5 percentage points over the same period last year; processed industrial products accounted for 89%, down 0.9 percentage points; agricultural and forestry products accounted for 6.9%, down 0.1 percentage point; aquatic products accounted for 2.7%, up 0.5 percentage points.

Realized import turnover of goods in February 2022 reached 25.38 billion USD, 101 million USD higher than the estimate. It is estimated that in March 2022, import turnover of goods would reach 32.67 billion USD, up 28.7% over the previous month and 14.6% over the same period last year. In the first quarter of 2022, the import turnover of goods is estimated at 87.77 billion USD, up 15.9% over the same period last year.

As for the structure of imported goods in the first quarter of 2022, raw materials for production accounted for 93.8%, up 0.1 percentage point over the same period last year; raw materials, fuel and other materials accounted for 47.6%, up 0.3 percentage points; consumer products accounted for 6.2%, down 0.1 percentage point.

In the first quarter of 2022, the United States was the largest export market of Vietnam with an estimated turnover of 25.2 billion USD while China is Vietnam's largest import market with an estimated turnover of 27.6 billion USD.

The balance of trade in goods in February had a trade deficit of 1.96 billion USD while it is estimated that there would be a trade surplus of 1.39 billion USD in March. In general, in the first quarter of 2022, the trade balance of goods is estimated to have a trade surplus of 809 million USD.

Import & Export

b) Imports & exports of services

In the first quarter of 2022, service export turnover is estimated at 1.05 billion USD, up 19.6% over the same period last year, of which tourism services gained 77 million USD (accounting for 7.3% of total turnover), an increase of 75%; transportation services reached 140 million USD (accounting for 13.4%), up 97.2%.

Service import turnover in the first quarter of this year is estimated at 5.18 billion USD, up 10% over the same period last year, of which transportation services gained 2.6 billion USD (accounting for 49.4% of total turnover), up 11.3%; tourism services reached 1.1 billion USD (accounting for 20.3%), up 16.7%.

There is a service trade deficit of 4.1 billion USD in the first quarter of 2022.

8. Consumer price index and inflation

The consumer price index (CPI) in March 2022 increased by 0.7% compared to the previous month. Average CPI in the first quarter of 2022 increased by 1.92% compared to the same period in 2021. CPI in March 2022 increased by 1.91% compared to December 2021 and by 2.41% over the same period in 2021.

Core inflation in March 2022 increased by 0.29% over the previous month and by 1.09% over the same period last year. In the first quarter of 2022, the average core inflation increased by 0.81% compared to the same period in 2021, lower than the general average CPI (up 1.92%). This reflects fluctuations in consumer prices mainly due to rising prices of food, gasoline, oil and gas.

Source: GSO

Compiled by VietnamCredit

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