In may, Vietnam’s economy witnessed more positive results than expected despite the complicated developments of the Covid-19 epidemic which directly affected a number of industrial parks in Vietnam. Statistics shows that the index of industrial production (IIP) in May 2021 increased by 1.6% compared to April and by 11.6% over the same period in 2020. Generally, for the first 5 months of 2021, the IIP increased by 9.9% over the same period in 2020, significantly higher than the increase of 1% in the first 5 months of 2020 and also higher than the increase of 9.5% in the same period in 2019.
Increasing industrial production has created momentum for exports as well as domestic consumption to grow positively. Domestic purchasing power has been improving considerably with total retail sales of goods and services in the past 5 months increasing by 7.6% over the same period last year.
The number of newly registered enterprises in May 2021 also increased by 8.1% over the same period in 2020 while the total registered capital increased by 33.6%. For the first 5 months of 2021, the total number of newly established enterprises and enterprises returning to operation reached 78.3 thousand enterprises, an increase of 11.9% over the same period in 2020.
Foreign investment capital into Vietnam has also witnessed an increase. As of May 21, total FDI into had reached 14 billion USD, up 0.8% over the same period in 2020. Realized FDI in the first 5 months of 2021 was estimated at 7.15 billion USD, increasing by 6.7% over the same period in 2020. This shows that the business environment in Vietnam has become increasingly reliable and attractive to investors in the region and the world.
Despite achieving positive results in the past 5 months, Vietnam’s economy is still facing many difficulties. In particular, the biggest concern in the immediate future is the negative impact of the 4th outbreak of the Covid-19 epidemic. This will be more clearly shown in the economic results of June 2021.
Exchange rate
In the past week, the USD / VND exchange rate decreased on both the official and unofficial markets. At VCB, compared to the previous week, the exchange rate of USD / VND decreased by 10 VND / USD, to 22,910 VND / USD (purchased) and 23,140 VND / USD (sold). Compared to the beginning of 2021, the USD / VND has decreased by 50 VND / USD.
On the unofficial market, the USD / VND exchange decreased by 50 VND / USD on the buyin and selling sides, to 23,150 VND / USD and 23,180VND / USD, respectively.
At the State Bank of Vietnam, the USD / VND exchange rate was stable at 23,125 VND / USD, which is 700 VND / USD lower than the ceiling price. Compared to the previous week, the USD exchange rate on the selling side decreased by 6 VND / USD to 23,782 VND / USD and was 50 VND / USD lower than the ceiling price.
Meanwhile, the central exchanged rate announced by the State Bank applicable to June 3, 2021 was 23,131 VND / USD, down 6 VND / USD compared to the rate announced the previous week.
Currently, foreign currency supply and demand in Vietnam is still quite balanced with the VND/USD interest rate gap remaining high, and the USD/VND exchange rate staying unchanged in the short term. The 4th outbreak of the Covid-19 epidemic may prolong this trend and put certain pressure on the exchange rate in the near future.
Gold price
The world gold price is still very high despite the USD showing signs of recovery.
In its lastest move, China informed that it would issue a lottery in June 2021 with an award being a free e-wallet worth 200 electronic yuan - eCNY ($31.34) to the winner.
The People's Bank of China (PboC) aims to be the first major central bank to issue an eCNY, which is part of an effort to internationalize the yuan and reduce its dependence on the global banking system where the US dollar prevails.
A FED official, Lael Brainard, said the disparity between supply and demand, which has led to higher consumer prices and limited employment, may be temporary. This is also meant as a reassurance for those worried about rising inflation.
The latest US inflation data shows that commodity prices are escalating as cash supply in the US increases sharply. Gold prices have a relatively impressive growth outlook and could be higher this year. Investors continue to choose gold as a reliable investment channel. The world's largest gold investment fund SPDR has bought 2.62 tons of gold, which makes the amound of gold held by it increase to 1,045.83 tons.
However, published data shows that the recovery of the US economy will not support gold prices. In the short term, gold prices are likely to fall.
At the end of the week, spot gold price was 1,907 USD / oz. Gold futures price in June 2021 on Comex New York was1,905 USD / oz, while on Kito it was from 1,899 to 1,900 USD/oz.
World gold price was about 54 million VND / tael, which is 3.7 million VND lower than the domestic gold price.
The domestic gold prices also saw a sharp increase due to concerns about the impact of the Covid-19 epidemic. In Hanoi, SJC gold price increased by 880 thousand VND / tael on the buying and by 1.13 million VND/tael on the selling sides, to 56.95 – 57.57 million VND / tael.
Source: Ministry of Industry and Trade
Compiled by VietnamCredit
