Vietnam News Today (Oct. 7): Vietnamese Economy Projected at US$2 Trillion by 2050
	Vietnam News Today (Oct. 8): Vietnam Makes Wholehearted Contributions to ASEAN

Indonesia's coast guard ship KN.Pulau Dana docks at PTSC Port in Vung Tau city. (Photo: VNA)

Vietnam, Indonesia coast guards strengthen cooperation

Indonesia's coast guard ship KN.Pulau Dana, with 54 crew members on board led by Lt. Col. Umar Dhani, docked at PTSC Port in Vung Tau city, beginning a courtesy visit to the southern province of Ba Ria-Vung Tau from October 8-11.

The welcoming ceremony was attended by Col. Nguyen Minh Khanh, Deputy Commander of the Coast Guard Region 3 Command, representatives from the Indonesian Consulate in Ho Chi Minh City, and other officials.

This marks the first visit by an Indonesian coast guard ship to Vietnam, realizing the cooperation agreement signed in 2021 between the two nations’ coast guard forces, Khanh said.

It reaffirms the fine cooperation between the two armies in general and their coast guard forces in particular, thus promoting the traditional friendship and strategic partnership between Vietnam and Indonesia, cited VNA.

It offers a chance for young officers from both sides to exchange experience in law enforcement, search and rescue operations, and handling environmental incidents.

The Indonesian delegation will engage in sports and cultural exchanges, and tours of historical sites and landscapes in Vung Tau, alongside joint training on search and rescue and marine firefighting.

UOB ups Vietnam’s 2024 GDP growth forecast to 6.4%

Despite the impact of Typhoon Yagi on business operations, Singapore-based United Overseas Bank (UOB) has raised its GDP growth forecast for Vietnam this year to 6.4% from its 5.9% projection about two weeks ago.

UOB released its update after Vietnam surprisingly announced its GDP growth of 7.4% in the third quarter and 6.82% in the first three quarters of the year, though it bore the brunt of typhoon Yagi in early September.

Yagi pounded northern Vietnam on September 6, triggering subsequent flash floods and landslides. The natural disasters caused an economic loss of more than US$3 billion.

The bank attributed Vietnam’s positive economic growth in the last quarter to the strong recovery of business activities following the COVID-19 pandemic, according to VOV.

UOB has raised Vietnam’s 2024 GDP growth forecast to 6.4%. (Illustration)

Manufacturing and services continue to be the primary drivers of business activities, while foreign trade maintained strong momentum in the third quarter. The increase in sales in the semiconductor industry since mid-last year indicates that this growth trend is likely to be sustained in the upcoming quarter.

According to the UOB report, the inflation rate slowed down to 2.6% in September compared to 3.45% recorded in August, as food prices, housing costs, and others continued to decline slightly. The third quarter of 2024 saw the consumer price index (CPI) fall to 3.5%, down from 4.4% in the second quarter. The average CPI increase so far has slowed to 3.9% year-on-year, down from a peak of 4.1% in July, which is lower than the State Bank’s target of 4.5%.

Other data from the third quarter of 2024 also reflect the overall resilience of the economy. Both exports and imports recorded growth rates of 10.7% and 11.1% year-on-year, respectively, in September, extending the trend of double-digit growth for the seventh consecutive month in 2024.

The latest Purchasing Managers’ Index (PMI) for Vietnam sharply declined to 47.3, marking the first time it has recorded a fall after five months of expansion in a row. This trend raises concerns about the country’s production capacity and supply chains, as well as the recovery of the agricultural and services sectors, in light of the disruptions caused by Typhoon Yagi.

These disruptions, according to UOB experts, are likely to be more pronounced in the October-November period. As a result, growth in the fourth quarter is forecast to slow to 5.2% year-on-year, down from 7.4% in the third quarter.

The bank also retained its 2025 GDP growth forecast of 6.6% for Vietnam, reflecting the anticipated increase in output at the beginning of next year to compensate for the losses incurred from Typhoon Yagi, as well as the spillover effects from the US Federal Reserve’s easing policies and China’s economic stimulus measures.

Chinese Premier Li Qiang to make first official visit to Vietnam

At the invitation of Prime Minister Pham Minh Chinh, Chinese Premier Li Qiang will make an official visit to Vietnam from October 12 to 14.

This marks Premier Li Qiang's first visit to Vietnam. The two leaders have previously engaged in several bilateral and multilateral meetings.

Premier Li Qiang's visit follows the successful trip made by General Secretary and President To Lam and his spouse to China in mid-August.

In a congratulatory message marking the 75th anniversary of China’s National Day (October 1, 1949 - October 1, 2024), Vietnam’s Party and state leaders emphasized the nation's consistent strategy of strengthening and developing a stable, healthy, and friendly cooperative relationship with China. This relationship is a strategic choice and a top priority in Vietnam's independent, autonomous, and diverse foreign policy, reported VNN.

Prime Minister Pham Minh Chinh and Premier Li Qiang during the visit to China in June 2023. Photo: Nhat Bac.

Vietnam’s leadership reaffirmed its readiness to work with China's senior leaders to maintain regular exchanges, strengthen strategic direction for bilateral relations, and continue fostering traditional friendship between the two Parties and countries. Furthermore, the leaders aim to enhance mutual understanding between the two peoples, push forward the Comprehensive Strategic Cooperative Partnership, and build a shared future for Vietnam and China that is ever deeper and more effective.

Since early 2024, the relationship between the two countries has maintained positive momentum, with strong cooperation across various sectors and levels. Both sides have acknowledged that bilateral relations have reached an unprecedented level of depth and comprehensiveness.

Economic, trade, and investment ties between Vietnam and China have grown robustly, with China being one of Vietnam's largest trade and investment partners. Various challenges have been addressed and resolved in recent times.

In the first half of 2024, bilateral trade volume increased by 24.1% compared to the same period in 2023, reaching $94.5 billion. China also continued to lead in foreign direct investment (FDI), with 447 new projects and a total registered capital of nearly US$1.3 billion.

Agricultural cooperation has also advanced, with both sides finalizing procedures for the official export of several Vietnamese agricultural products to China, such as frozen durian, fresh coconuts, fresh chili, and passion fruit.

Defense and security cooperation has grown through various channels, and new mechanisms have been established and implemented.

People-to-people exchanges have been lively, not only through official organizations but also in terms of travel between the two countries. In the first seven months of 2024, over 2.1 million Chinese tourists visited Vietnam, making China the second-largest source of international visitors to the country.

Vietnamese PM meets with top leader of Laos ahead of ASEAN Summits

Vietnamese Prime Minister Pham Minh Chinh had a meeting with General Secretary of the Lao People’s Revolutionary Party Central Committee and President of Laos Thongloun Sisoulith in Vientiane on October 8, during which he congratulated Laos - Chair of ASEAN in 2024 - on the successful organization of the bloc’s important events.

PM Chinh, who is in Vientiane to attend the 44th and 45th ASEAN Summits, expressed his belief that with its thorough and professional preparations, along with experiences gained during its ASEAN Chairmanship in 2004 and 2016, Laos will successfully host the ASEAN Summits and the 45th General Assembly of the ASEAN Inter-Parliamentary Assembly (AIPA), thereby practically contributing to stable and sustainable development along with growth in the region and promoting its role and position in the international arena.

The Party, State, and people of Vietnam always attach importance to and give the top priority to the great friendship, special solidarity, and comprehensive cooperation with Laos, considering this as a priceless asset, an objective requirement, a leading priority, a top choice, and a vital factor of the revolutionary causes in the two countries that needs to be maintained for future generations, he noted.

The PM pledged to request Vietnamese ministries, sectors, and localities to closely coordinate with their Lao counterparts to properly carry out the high-level agreements between the two nations, including the joint statement issued during the state visit to Vietnam by the Lao Party General Secretary and State President from September 10-13, cited VNA.

Vietnamese Prime Minister Pham Minh Chinh (left) meets with General Secretary of the Lao People’s Revolutionary Party Central Committee and President of Laos Thongloun Sisoulith in Vientiane on October 8. (Photo: VNA)

The host leader appreciated Vietnam’s valuable material and spiritual assistance to Laos to address flood consequences.

He also spoke highly of Vietnam’s active support for Laos during the ASEAN Chairmanship 2024, attributing the success of Laos as ASEAN Chair partly to Vietnam’s contributions.

Both host and guest held that in the coming time, the two sides should focus on effectively implementing the two countries’ cooperation treaties and agreements, especially the outcomes of the recent meeting between the Vietnamese and Lao Political Bureaus in Hanoi, and further enhancing the connectivity between the Vietnamese and Lao economies as well as among the Vietnamese - Laos - Cambodian economies.

The two countries will maintain frequent experience and information exchanges while keeping close coordination and mutual support at international and regional forums, especially ASEAN, the United Nations, and sub-regional mechanisms, they said.

Amid complicated developments in the region and the world, they affirmed that Vietnam and Laos will press on with nurturing the “forever green and sustainable” bilateral relations and developing economic collaboration in an increasingly result-oriented and effective manner, and on par with the political relationship to better meet each country’s interests and development demand in the new period.

Almost 70% of European businesses recommend Viet Nam as investment destination: BCI report

Almost 70 percent of European business leaders in Vietnam would recommend the country as an investment destination. This continued positive sentiment reinforces business trust in the country’s economic well being despite a challenging year.

The European Chamber of Commerce in Vietnam (EuroCham Vietnam) released its third quarter of 2024 Business Confidence Index (BCI) report on October 8, reflecting a positive trend in business sentiment despite the economic challenges posed by Typhoon Yagi and operational hurdles.

The BCI score saw a notable increase, rising from 45.1 in the third quarter of 2023 to 52.0 this quarter, signaling a strong year-on-year recovery despite tough external conditions.

The damage caused by Typhoon Yagi, which has severely impacted the infrastructure and agricultural sectors in Northern Vietnam, has led the Vietnamese government to forecast a 0.15 percent reduction in GDP for 2024, with estimated losses reaching US$1.63 billion.

Yet EuroCham's latest survey, conducted after the typhoon from September 12-25, shows that nearly half (47.4 percent) of respondents are confident their companies will see improvement in the coming quarter. Additionally, long-term optimism remains high, with 69.3 percent expecting a favorable business climate over the next five years.

Green transition and digitalization take center stage

Following the new Decree on the mechanism for Direct Power Purchase Agreement (DPPA) issued in July this year, nearly 30 percent of respondents expect to benefit from renewable energy projects, further solidifying Vietnam's commitment to a green transition.

One in four service providers and companies with 100 or more employees anticipate the DPPA will benefit them moderately or significantly. While approximately half (47.4 percent) of surveyed businesses are confident in their ability to fully transition to renewable energy by 2050, gaps remain in policy understanding and implementation, VGP reported.

Viet Nam retains its appeal as an investment destination for European businesses.

Digitalization was also identified as a critical area for improvement, particularly in alleviating human resource constraints and streamlining administrative processes. The BCI survey revealed a moderate rate of artificial intelligence (AI)/machine learning (ML) adoption, with 46.1 percent of companies reporting to have adopted AI/ML in their operations. However, most adoption remains in the early stages, pointing to substantial opportunities for investment in digitization projects.

Business travel and expansion trends

In addition to digitalization, businesses are adapting their travel strategies in response to rising airfares. Over 40 percent of respondents reported becoming more selective with their business trips or opting for alternative transportation due to high travel costs, while some have reduced or canceled travel plans altogether.

Despite these hurdles, business expansion plans remain strong, with close to 80 percent of companies reporting 1-3 offices or manufacturing units in Vietnam. Among businesses that shared their expansion plans, over half plan to expand operations, with many intending to establish new manufacturing facilities in the North or open additional offices in key cities such as Ha Noi, Ho Chi Minh City, Da Nang, and Can Tho.

EuroCham's BCI survey is conducted by Decision Lab to gather and analyze insights from the chamber's network of 1,400 members.

This quarterly assessment acts as a barometer of sentiment among European businesses operating in Vietnam, providing real-time insights into the evolving business landscape of one of Southeast Asia's most dynamic markets.

The BCI gauges perceptions of current conditions and future expectations, helping to inform strategic decisions and policy advocacy.

Vietnam News Today (Oct. 5): Vietnam's Top Leader Attends 19th Francophonie Summit in France Vietnam News Today (Oct. 5): Vietnam's top leader attends 19th Francophonie Summit in France; Vietnam keen to develop stronger ties with Algeria; Peru and Vietnam ...

Vietnam News Today (Oct. 6): Vietnamese GDP Growth in Q3 Projected at 5.3% Vietnam News Today (Oct. 6): Vietnam and the OIF enhance cooperation; Vietnamese language and culture day held in Brunei; Vietnamese GDP growth in Q3 projected ...