Vietnam News Today (Jul. 7): Vietnam to Resume Swift Medium-term Economic Growth

Photo: VOV

Vietnam to resume swift medium-term economic growth

The nation is poised to resume rapid economic growth over the medium-term economic outlook, with the “rising star” being one of the fastest growing emerging markets in Asia, according to details given by foreign newswires.

In an article published on the website of S&P Global Market Intelligence, Asia Pacific Chief Economist Rajiv Biswas outlined that Vietnam is expected to continue to be a key beneficiary of the shift in global manufacturing supply chains towards competitive Southeast Asian manufacturing hubs.

He stated that the country will continue to benefit from its relatively lower manufacturing wage costs relative to coastal Chinese provinces. Indeed, it boasts a relatively large, well-educated labour force compared to many other regional competitors throughout the region, thereby making it an attractive hub for manufacturing production by multinationals. Along with this, many multinationals have been in the process of diversifying their manufacturing supply chains during the past decade as they seek to reduce vulnerability to supply disruptions and geopolitical events.

The nation is also set to benefit from its growing network of free trade agreements such as the ASEAN Free Trade Agreement (AFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU-Vietnam Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership (RCEP), Biswas added.

The Economic Times explained that the country is among the economies likely to benefit from the global supply chain changes, whilst it has done relatively well in attracting big names over the past few years such as Samsung, Apple, Google, Nike, and Adidas.

On Eurasia Review, analyst and journalist Matija Šerić cited PricewaterhouseCoopers as saying that the nation is already a regional (middle) power, and in the future it could become an even stronger power in Asia and in the Indo-Pacific region as a whole, with its influence potential being even wider. By 2050, the Vietnamese economy could be the 10th largest in the world.

Experts therefore include Vietnam among the group of Next-11 countries, including Egypt, Mexico, Nigeria, and others, which together with the BRICS (Brazil, Russia, India, China, and South Africa) will be among the largest world economies of the 21st century.

Šerić noted that there are three main factors that have contributed to the rapid rise of GDP growth, production, and investments. The first factor refers to the almost maximum liberalisation of trade with Asia and the rest of the world, with another factor being domestic reforms through the deregulation of the economy and the lowering of labour prices. The third important factor is large investments through public investments in human and material capital.

The International Monetary Fund (IMF) projected that Vietnamese economic growth will recover in the second half of the year, hitting roughly around 4.7% for the year, supported by a rebound in both exports and expansionary domestic policies. Inflation is also projected to remain contained below the State Bank of Vietnam’s 4.5% ceiling.

Participants in the 14th Annual Meeting of the New Champions of the World Economic Forum (WEF) in Tianjin, China, in late June outlined that Vietnam is one of the bright spots in terms of economic recovery in the region and a successful example in the pandemic combat, whilst also playing a pioneering role in changing its growth model and committing to energy transition, cited VOV.

Titled “Vietnam: A rising star in emerging markets”, an article published on US-based websiteportfolio-adviser.com outlines there is frequent hope that the nation will be upgraded from its current, off-benchmark, frontier market status to emerging market status by the MSCI. This comes amid its stock market now meeting the size and liquidity requirements to be included, with a four-fold surge in retail participation during recent years driven by digital account technology.

However, the limiting factor is the strict foreign ownership limits (FOLs) that constrict the market depth, it added.

HCM City supports hi-tech agricultural start-ups

Ho Chi Minh City will give priority to supporting and nurturing high-tech agricultural production start-ups of young entrepreneurs in an aim to raise the proportion of high-tech agriculture in the city's total agricultural land.

According to the city’s Department of Agriculture and Rural Development, the city has more than 60,000 hectares of agricultural land, but the area under high-tech agriculture is less than 1%.

By 2030, it targets to increase the proportion of high-tech agriculture in the city's total agricultural land by up to 10%.

It now has about 4,300 agriculture enterprises, accounting for 1% of the total number of enterprises in the city, according to VNA.

Cantaloupe melons grown in a greenhouse in the HCM City Agricultural High-tech Park in CuChi district. (Photo: VNA)

The production value of the agricultural sector is only on-fifth the value of other sectors. .

The department has coordinated with the city’s Department of Science and Technology, the Business Startup Support Centre under the municipal Youth Union, and the people's committees in districts and Thu Duc city to nurture business confidence and the entrepreneurial spirit among young people for developing high-tech agricultural startups.

It submitted a draft amendment to the policy on providing loan interest rate support for high-tech agriculture to build net houses and greenhouses on agricultural land.

In addition, the Department of Science and Technology and the Business Startup Support Centre are offering a number of policies to support innovative start-ups in high-tech agriculture.

Cambodian tourists to Vietnam surge by 338% in H1

With an annual increase of 338% recorded during the first half of the year, Cambodian tourists saw the largest growth among global visitor numbers during the country’s significant post-pandemic recovery period, according to online newspaper Khmer Times.

Cambodian nationals now constitute the largest growing segment of the Vietnam tourism market, the Cambodia-based media outlet stressed.

Photo: VOV

Elsewhere, Cambodian tourists were closely followed by Indian travelers, which witnessed growth of 236% compared to 2019. Laos came third with a growth rate of 117%, followed by Thailand with an increase of 108%, and Singapore, up 107%.

The Khmer Times also noted that Vietnamese tourism offerings include a visa-free stay of up to one month for citizens of Thailand, Singapore, Indonesia, Cambodia, and Laos, which serves to make the nation a great attraction among tourists originating from Southeast Asia.

The central beach city of Da Nang, the ancient town of Hoi An, Da Lat – the city of thousand flowers in the Central Highlands region, Nha Trang, Vung Tau, and the “Paradise Pearl Island” of Phu Quoc are some of the top Vietnamese destinations among Cambodian tourists, it wrote.

As well as for tourism, many Cambodians regularly visit the country for medical purposes, the article added.

France, Italy ready for Da Nang int'l fireworks festival final

Fireworks teams from France and Italy who have entered the final of the Da Nang International Fireworks Festival (DIFF) 2023 are now ready for their last performances on July 8.

Edouard Gregoire, head of the French team, said the team has made thorough preparations in both techniques and music, aiming to leave strong impressions on spectators and the jury.

Meanwhile, their Italian rivals will light up the Da Nang sky with a “firework dance” carrying a message of encouraging people to overcome difficulties after the COVID-19 pandemic, cited VNA.

Da Nang is the only locality in Vietnam to host a fireworks festival. (Photo: VNA)

According to the Da Nang Department of Tourism, more than 63,000 tourists, of them 19,000 foreigners, are expected to stay in the city on the final night.

Da Nang is the only locality in Vietnam to host a fireworks festival, making it a magnet for the best fireworks producers from around the world each year since 2008. It has been building a "Fireworks Festival City" reputation to promote it as a top destination in central Vietnam and Asia.

The festival has helped the city win recognition as Asia’s Leading Festival & Event Destination in 2016 and 2022 by the World Travel Awards.

Electronic payment continues to flourish in Vietnam

The trend of electronic and non-cash payments in the Vietnamese economy in 2023 continued to record growth of 52.35% in volume over the same period last year.

Data released late last week by the State Bank of Vietnam (SBV) showed payment transactions via QR code are increasingly popular in Vietnam while ATM transactions are decreasing in both quantity and value.

Accordingly, transactions via Internet channels in the first five months of 2023 increased by 75.54% in quantity and 1.77% in value and the rise for transactions via mobile channels rose by 64.26% in quantity and 7.65% in value. Notably, transactions via QR code surged by 151.14% and 30.41% in volume and value, while transactions via POS also increased by 30.35% and 27.27% in volume and value, respectively.

A customer pays for coffee via QR code in Hanoi. (Photo: VNA)

Meanwhile, transactions made via ATM in the period decreased by 4.62% in quantity and 6.43% in value, reflecting the trend of shifting to electronic and non-cash payments.

To promote the trend of electronic and non-cash payment, the SBV has continued to streamline the legal framework for payment activities and bank digital transformation. At commercial banks, investment activities for digital transformation and digital payment have been also increasingly promoted with updated applications of new versions, VNS reported.

According to the SBV, some commercial banks have so far provided loans electronically and approved online lending documents.

Pham Anh Tuan, Director of the SBV’s Payment Department, said the SBV had completed the amendment of Circular 39, which supplements regulations on lending activities through the use of electronic means, which will be issued in the near future.

Though appearing many years ago, payments by QR code have become more popular recently in Vietnam, penetrating businesses around the country - seemingly all at once.

This change is partly the result of the Government’s efforts to promote digital transformation and cashless payments over the past few years and partly due to changes in consumers’ shopping habits.

QR payments are receiving the support of the whole of society. Banks and fintech organisations are actively participating in market expansion and increasing payment acceptance points. Most customers using the service are modern users who are more adaptable and easily accept new things.

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