Vietnamese economy grows by 3.72% in first half of 2023

The Vietnamese economy is continuing to encounter difficulties as it only expanded by estimated 3.72% in the first half of the year, according to statistics released by the General Statistics Office (GSO).

This is the lowest growth the economy has recorded in the first six months of the 20211—2022 period, except for the 1.74% rate obtained in the January-June period of 2020, the GSO said on June 29.

Notably, the services sector secured the highest growth, at 6.33%, fueled by domestic consumption stimulation and tourism promotion policies. It was largely contributed by wholesales and retails sales (up 8.49%), transportation and logistics (up 7.18%), finance-banking services (7.18%) and lodging and catering services (up 15.14%).

The services sector was followed by agro-forestry-fishery that grew by 3.07% thanks to high export earnings, and by industry that inched up by only 0.44%, the lowest growth in the 2011-2022 period, cited VOV.

Photo: VOV

The GSO also announced that the local economy grew by 4.14% in the second quarter of the year, the lowest figure in the 2011-2022 period, except for the 0.34% rate attained in the same period of 2020.

According to GSO general director Nguyen Thi Huong, the Vietnamese economy continued to be affected by unfavourable factors of the world economy in the second quarter of 2023 and the first 6 months of the year. The factors include the prolonged conflict in Ukraine and a tight monetary policy introduced by major economies that are Vietnam’s key trading partners.

However, this is a positive result amidst global economic difficulties and challenges, said Huong.

Level-2 Field Hospital Rotation 5, Engineering Unit Rotation 2 deployed to UN missions

A ceremony was held in Ho Chi Minh City on June 29 to deploy Level-2 Field Hospital Rotation 5 and Engineering Unit Rotation 2 of Vietnam for peacekeeping operations in the United Nations missions in South Sudan and Abyei.

The event saw the presence of President Vo Van Thuong, Commander of the people’s armed forces and Chairman of the National Defence and Security Council.

Level-2 Field Hospital Rotation 5, which will replace Level-2 Field Hospital Rotation 4 in South Sudan, consists of 63 members, including 11 females. Meanwhile, Engineering Unit Rotation 2, replacing Engineering Unit Rotation 1 in Abyei, has 184 members, including 19 females, according to VNA.

President Vo Van Thuong, military officials, and members of Level-2 Field Hospital Rotation 5 and Engineering Unit Rotation 2 at the deployment ceremony on June 29 (Photo: VNA)

In his speech, President Thuong affirmed the Party and State’s consistent foreign policy of independence, self-reliance, and diversification and multilateralisation of external relations for regional and global peace, cooperation, and development. He stressed that the country's political commitment is to stay ready to join hands in settling difficult issues and maintaining a peaceful and stable environment for cooperation and development.

So far, the country has sent 533 officers and professional soldiers to UN peacekeeping operations, and they have properly fulfilled their tasks. The achievements by the UN peacekeeping force of Vietnam have been highly valued, helping with the realisation of the Sustainable Development Goals and the Millennium Development Goals of the UN.

The State leader affirmed that the Party and State always put trust in the Vietnamese peacekeeping force, are proud of the force’s achievements, and also believe that the deployed units will build up attainments of their predecessors and bring into play their mettle, wisdom, and capabilities during the performance of the noble duties assigned by the Party, State, army, and people to meet requirements of the UN.

President Thuong also took this occasion to thank the UN, international partners, and peace-loving people around the world for their precious assistance for Vietnam’s national construction and safeguarding, as well as preparations for and deployment of personnel to UN peacekeeping missions.

Koreans top foreign visitor numbers in six-month period

The initial six months of this year saw the Republic of Korea (RoK) become Vietnam’s largest source market of tourists with over 1.6 million arrivals, 80% equivalent to the same period from 2019.

The Vietnam National Administration of Tourism (VNAT) reported more than 286,000 Koreans visited the country in June alone, marking an increase of 15% compared to the previous month and equal to 90% of the same period from 2019.

According to Huynh Phan Phuong Hoang, deputy general director of Vietravel, the short flight time is one of the main reasons for the increasing number of Korean tourists to Vietnam. Budget airlines also offer affordable airfares, with one-way routes from Incheon to Tan Son Nhat in Ho Chi Minh City priced at around VND2.9 million, equal to US$123.

Furthermore, the affordability of hotel rooms, an array of natural landscapes, delicious food, beautiful beaches, shopping opportunities, and various tourist activities, are all significant pulls luring Korean tourists, she added.

Ho Anh Vu, head of Marketing and Communication Department of Banyan Tree Lang Co, shared that favourable weather is also a strong point for the Vietnamese tourism industry to attracts Korean visitors. Korean guests who enjoy playing golf tend to visit the country during the winter months as most golf courses in the RoK are frozen, reported VOV.

Korean tourists visit a popular destination in Hanoi (Photo: Phuong Cuc)

Besides the RoK, the other main source markets of tourists which also saw an increase in visitor numbers included the United States, up 51%, Norway, up 51%, Singapore, up 48%, Laos, up 25%, Taiwan (China), 21%, and the Philippines, up 10%.

Meanwhile, several European markets witnessed a decline in the number of tourists visiting the nation, such as France, down 41%, Hong Kong (China), down 37%, Belgium, down 33%, Italy, down 31%, Canada, down 31%, Switzerland, down 28%, the Netherlands, down 27%, and Denmark, down 22%.

FDI flows into Vietnam forecast to increase in H2: Experts

The flows of foreign direct investment (FDI) into Vietnam are forecast to increase in the second half of the year as the downturn has been improved in recent months, experts have said.

Only a few days after Do Nhat Hoang, Director of the Foreign Investment Agency under the Ministry of Planning and Investment (MPI), announced that many large-scale projects, including billion-USD ones from Republic of Korea (RoK) firms are waiting to enter Vietnam, Hai Phong authorities on Jun 26 handed over a licence to LG Innotek Vietnam Hai Phong Co., Ltd. to add over 1 billion USD to its project in the northern port city, raising its total investment to over 2.05 billion USD.

However, the sum has yet to be counted in the total amount of FD in Vietnam in the first six months of 2023 when the additional capital poured into underway projects was recorded at 2.93 billion USD, down 57.1% year on year.

The reasons behind the decline include a lack of expansion of big projects, while a large amount of the added capital recorded in the first half of 2022 at 6.82 billion USD, cited VNA.

The total FDI that Vietnam has attracted in the first six months of this year has reached 13.43 billion USD. (Photo: VNA)

However, insiders noted that the situation has been improved, as the total FDI that Vietnam has attracted in the first six months of this year has reached 13.43 billion USD, a decrease of only 4.3% year on year, a lower level than a downturn of 7.3% in the five months, 17.9% in the four months, and 38.8% in the three months.

While the added capital fell sharply, the newly-registered capital in the first six months of this year increased strongly at 31.3% to 6.94 billion USD, and the capital poured in capital contribution and share purchase deals also surged 76.8% to over 4 billion USD.

Once the capital injected in LG Innotek project is recorded, the chance for FDI in Vietnam to reverse is high.

Particularly, in the first half of this year, 10.2 billion USD of FDI was disbursed, up 0.5% year on year.

Hoang said that the increase in the disbursement rate showed the efficiency of the Government’s efforts to support businesses in implementing their projects.

However, according to Hoang, although many large-scale firms are showing interest in Vietnam, they have remained cautious in giving final decisions.

He said that Japanese and RoK investors have tended to slow down in making investment decisions to consider internal problems of the economy and the US’s encouragement of investors to switch production chains from China to other countries.

Meanwhile, investors from Taiwan (China) are flocking to Vietnam, especially in the fields of electricity, electronics, technology and electric vehicles. Chinese firms are also establishing new production facilities outside the country to make full use of the host countries’ advantages.

Right after China’s reopening, Chinese investors have flocked to Vietnam. In the first six months of this year, China ranked third in terms of registered FDI in Vietnam with 1.95 billion USD, and ranked first in the number of new projects, accounting for 18% of the total 1,293.

Polytex Far Eastern Vietnam Ltd from Taiwan plans to invest an additional 250 million USD in Vietnam in the third quarter of 2023, raising its total investment to over 1 billion USD. Meanwhile, Cheng Loong, also from Taiwan, is implementing the second phase of its 1-billion-USD project in Vietnam.

Xiamen Hithium Energy Storage Technology and Growatt New Energy from China are also reportedly considering to invest a total of 1 billion USD in Vietnam.

These are positive news, and if realised, the FDI flows into Vietnam will increase remarkably in the coming time.

Switzerland supports to develop sustainable tourism in Vietnam

According to the Vietnam National Administration of Tourism (VNAT), the Swiss Government will support Vietnam support Vietnam’s tourism sector becomes more sustainable through the Project “Swiss tourism for Sustainable Tourism Development” (ST4SD) in the period of 2023 – 2027.

The project has been proposed at an important time for Vietnam's tourism industry, following the approval of the Vietnam Tourism Development Strategy and the Vietnam Tourism Marketing Strategy until 2030. In addition, the project can also help address the effects of the COVID-19 pandemic on Vietnam's tourism industry.

The ST4SD project will strengthen the sustainability and inclusiveness of Vietnam's tourism industry through 3 outcomes. Outcome 1: Supporting national policy makers to foster sustainable tourism – National and subnational action plans, master plans and other policies. Outcome 2: Vietnamese training institutions have been strengthened to provide training and develop skills and expertise in hospitality industry. Outcome 3: Tourist destinations and companies have become more sustainable in their operation and investments.

At the Consultation meeting for the Development of Project Documents “Swiss tourism for sustainable development in Vietnam” held in Ha Long City, Quang Ninh Province, on June 26, VNAT Deputy Director General Ha Van Sieu welcomed the Swiss Government's decision to support Vietnam tourism industry through the ST4SD. He emphasised that this support was timely in the context that Vietnam's tourism industry is trying to recover from the COVID-19 pandemic.

Switzerland has the developed and famous tourism industry in the world. The country owns many similar landscapes and tourism resources to Vietnam, such as mountain tourism and rural tourism. Tourism training institutions in Switzerland are known to be prestigious vocational skills training schools in fields of hospitality management, restaurant management and food processing, travel, and tourism.

Therefore, the VNAT’s Deputy Director General expects that with the sponsorship of the Swiss Government, the advanced tourism development and management experience, high training level will be transferred to the Vietnam tourism industry, NDO reported.

Photo: NDO

The ST4SD project has the goal of supporting national and subnational action plans, master plans and other policies to foster sustainable tourism development. Through the project, businesses and local people directly engaged in tourism have the opportunity to raise awareness, build capacity, and change behaviour in protecting, managing, and contributing to the development of a more diverse ecological environment. The project also focuses on developing business models and sustainable tourism products. As such, the project aims to develop sustainable, comprehensive, circular tourism associated with nature conservation and improving livelihoods.

The project is in the launching stage, developing and finalizing project documents to submit to competent authorities.

Therefore, to achieve maximum efficiency for the tourism industry and beneficiaries, Ha Van Sieu suggested that the members of the Working Group, representatives of departments under the Vietnam National Administration of Tourism, Ministry of Culture, Sports and Tourism, local tourism management departments, and experts in the field of tourism actively discuss and contribute to the development of project documents.

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