In the recently published report, DSC Securities said that at present, Vietnam's indicators all show that the economy is at the end of the recession phase in the economic cycle.
Specifically, PMI began to expand after a long period of contraction, rising above the 50-point threshold for the first time in 6 months. With a result of 50.5 - up from 48.7 in July, it shows that business conditions in the manufacturing industry have improved slightly.
Credit growth is still very weak compared to the same period last year (from 9.62% in August 2022 to 5.2% this August). In addition, the bad debt coverage ratio of large banks is approximately 100%. By the end of the first quarter, the average bad debt ratio on total outstanding loans was about 2.9%, up from an average of 2% at the beginning of the year.
Another indicator is that FDI capital has improved the most since the beginning of the year. In the first 8 months of the year, Vietnam's foreign investment capital reached USD 18.15 billion, (up 8.2% over the same period). In terms of disbursement, realized FDI reached USD 13.1 billion (up 1.3% over the same period).
Besides, import-export turnover experienced the most rapid growth rate in 12 months; tourism recovers well; retail sales of goods and services have recovered equivalent to the peak reached in the fourth quarter of 2022.
Public investment disbursement progress is good, reaching 42.1% of the Government's plan and higher than the same period in 2022.
According to DSC, Vietnam's economy is now highly open and will inevitably move according to the cycle of the world economy. Currently, although the Western economy is stronger than expected, it has not recovered. China's economic recovery is weak. The issued support policies have not had much effect (such as reducing interest rates but no credit growth). Therefore, DSC assesses that Vietnam's economy is still at the end point of the recession cycle.
With the expectation that tourism will continue to recover strongly, domestic consumer demand will increase, and support policies will become a foundation for the economy, China will begin to recover better from the fourth quarter of 2023. DSC maintains the expectation that Vietnam's economy will continue to recover in the same period.
Regarding import and export, the total import and export turnover of goods in August reached USD 60.92 billion (up 6.7% over the previous month and down 7.9% over the same period). This is the highest increase in the past 12 months.
In particular, exports reached USD 32.37 billion (up 7.7% over the previous month and down 7.6% over the same period last year).
Imports reached USD 28.55 billion (up 5.7% over the previous month and down 8.3% over the same period). Thus, the trade balance in August continued to lean towards trade surplus with USD 3.82 billion (up 24% over the previous month); Accumulated trade surplus since the beginning of the year reached USD 20.19 billion.
The group of processed industrial goods continued to be the main driving force for the country's export growth in August with a turnover of USD 27.68 (up 7.1% over the previous month).
Exports of all types of phones and components increased by 16.8%. This is considered an achievement in attracting foreign investment with production facilities of major technology companies such as Samsung, LG, and Foxconn built in Vietnam.
In addition, the export turnover of some industries such as textiles, seafood, pepper, wood, leather and shoes has narrowed its decline significantly due to gradually increasing number of orders.
DSC believes that demand from main export markets is still weak but is gradually recovering more positively in August.
Source: DSC, vietnambiz
Compiled by VietnamCredit
