Vietnam News Today (Sep. 2): Vietnamese Economy Records Remarkable Recovery

A corner of Ho Chi Minh City. Photo: VNA

Vietnamese economy records remarkable recovery

The nation recorded the highest level of disbursed foreign direct investment (FDI) over the past eight months compared to the same period over the last five years, as well as seeing a growing number of newly-established enterprises and those returning to operation.

According to the General Statistics Office (GSO) under the Ministry of Planning and Investment, most notably, import and export turnover increased, although keeping the growth rate in the context of international economic fluctuations is widely viewed as a new challenge that needs to be identified and requires greater efforts moving forward.

In the eight-month economic statistics table recently released by the GSO, the industrial production index is of interest to many experts as it continues to increase strongly and is back to the pre-pandemic growth rate of roughly 15%.

This figure also indicates the resilience of the manufacturing, industrial and agricultural sectors in helping to ensure a sustainable and stable supply and contributing to efforts to curb the sudden increase of the consumer price index (CPI).

Export turnover in August was estimated to be US$33.38 billion, bringing the overall export turnover over the past eight months to US$250.8 billion, up more than 17% on-year, mainly in the group of processed industrial products.

Furthermore, import turnover of goods in August stood at an estimated US$30.96 billion, raising the import turnover during the reviewed period to roughly US$246.84 billion, up 13.6% on-year, primarily in the group of production materials.

The trade surplus in August reached US$2.42 billion, while that of the eight-month period was estimated to be at US$3.96 billion.

Dr. Le Duy Binh, director of the Economica Vietnam Center for Economic Research, said that this trade surplus greatly supports the implementation of monetary policies, especially amid the difficult pressures faced by the country in recent times.

"In general, the growth rate took place amid the CPI soaring by only about 2.5% and core inflation by about 1.6%, which is a bright spot in the current economic situation when many major economies in the world and many other economies in the region are facing plenty of difficulties, struggling with high consumer price index and high inflation. This is a positive point for the Vietnamese economy in the current context,” Binh went on to say.

One of the other notable indicators is the business registration situation is the whole country having nearly 150,000 enterprises registered as new establishments or returning to operation, an increase of more than 30% compared to the same period last year. On average, every month, 18,700 enterprises are newly established and resume their operations.

However, the number of enterprises withdrawing from the market was 104,300 enterprises, representing an increase of 22%. On average, 13,000 businesses withdraw from the market every month.

Experts believe that, in addition to the positive growth rate in general, it can be viewed as necessary to clearly analyse and take a deep look at this issue. The fact is that many firms were forced to withdraw from the market because they failed to meet the requirements of the economy or were unable to endure the difficulties experienced since the pandemic. This indicates that the recovery pace of growth is not sustainable, especially in the new context.

According to details given by experts, inflation pressure from now until the end of the year remains very large. The lag of inflation will therefore focus on the remaining quarter of the year and the whole following year. The management of fiscal and monetary policies will require special attention in terms of the management of petrol and oil prices as it continues to be an issue, cited VOV.

Moreover, experts note that all changes in the labour market or changes in consumer behaviour must be monitored to ensure that growth remains high without affecting the major balances of the national economy.

When the macro economy is stable in the final months of the year, it will be a premise for strong and sustainable growth enjoyed by the whole economy in 2023.

All of this therefore requires more flexible policies alongside continuing reforms even in the midst of economic recovery, while each economic sector, each citizen, and each enterprise should step up greater efforts in this process, experts emphasized.

National Covid-19 caseload rises to 11,414,359

The national Covid-19 caseload rose to 11,414,359 on September 1, according to the Ministry of Health. ​

With 9,027 patients given the all clear during the day, the number of recoveries rose to 10,187,787. Meanwhile, there are 107 patients needing breathing support, according to WVR.

A COVID-19 critically-ill patient under care at an ICU of the National Hospital for Tropical Diseases. Photo: VNA

No death from Covid-19 was recorded in the past 24 hours. The total fatalities stood at 43,117.

On August 31, an additional 417,215 doses of vaccines were administered, raising the total number of doses of Covid-19 vaccines injected to 257,063,479.

Tourism sector pushes digital transformation for future growth

Digital transformation has been essential for the tourism sector in the post-Covid-19 period by optimising operations, cutting expenses, improving efficiency, and attracting more visitors.

From 2015 to 2019, online searches for tourism information surged over 32-fold in Vietnam. Up to 88% of domestic travellers looked up information on the internet, and there were over 5 million searches in Vietnamese for tourism products each month, according to the Vietnam Tourism Association.

However, the effectiveness of digital transformation within Vietnamese travel companies remained modest during that period, with up to 80% of the domestic online tourism market held by foreign online travel agents (OTAs) such as Agoda.com, Booking.com, Traveloka.com, and Expedia.com. Local OTAs like Vinabooking.vn, Chudu24.com, Ivivu.com, VNTrip, Mytour.vn, and Gotadi only made up 20% with a limited number of transactions.

In Vietnam, more and more foreign tourists prefer destinations in rural areas for their vacations. Photo: VNA

Ngo Minh Duc, founder of Gotadi - a provider of online travel services, said that to gain a firm foothold in the domestic market, businesses should master information technology, which is also why his firm has invested in an OTA platform.

In particular, in the post-pandemic period, when most consumption habits have changed and moved to online platforms, it’s time for travel businesses to enter a fierce competition on cyberspace, from client access to tickets, tours and room bookings, reported VNA.

This new trend also means business efficiency, Chairman of the Vietnam Tourism Association Vu The Binh said, noting that as travellers switch to booking services online and companies do not act accordingly, they will be missing out.

Travelogy Vietnam has undergone this transformation. Thanks to the application of digital technology, each of its employees can now handle 500 bookings per day, instead of 10 employees needed to deal with 100 bookings per day in the past.

Recently, Crystabaya Pte Ltd, an online platform providing tourism services, has applied blockchain to help clients directly monitor the availability of rooms and other services. The application has also reportedly assisted hotel and resort owners to cut down expenses as their data is stored safely using this technology.

Apart from enterprises, ministries, sectors, and local authorities are also acting to meet the demand for “contactless” services by stepping up technology use in handling exit - entry procedures, promoting tourism, and selling tickets to tourist sites.

Digital transformation could mark the start of a strong recovery and development period of the entire tourism sector after the Covid-19 pandemic.

Logistics industry’s potential yet to be maximized

Vietnam’s logistics industry has yet to have its potential fully tapped, and the country needs timely solutions to meet the surging demand for logistics infrastructure.

A survey by Savills Vietnam showed that the logistics industry is enjoying significant growth thanks to the expansion of the national economy, manufacturing sectors, and e-commerce.

Vietnam ranked 11th in the 2022 Emerging Market Logistics Index released by logistics and transportation service provider Agility, following only Indonesia, Malaysia and Thailand in the Association of Southeast Asian Nations (ASEAN).

Vietnam's transportation and logistics market is expected to grow at an estimated compound annual growth rate (CAGR) of 7% in during 2021 - 2026.

Director of Savills Hanoi Matthew Powell held that Vietnam is now a destination for many manufacturing and logistics businesses, especially amid the e-commerce boom. This is coupled with soaring demand for high-quality industrial real estate.

An aerial view of Nam Hai - Dinh Vu Port in Hai Phong city. Photo: VNA

He noted currently, many enterprises find it difficult to search for locations for their factories and warehouses. Industrial parks and logistics establishments, especially around big cities like Hanoi, have high occupancy rates, even up to nearly 100% in many places. Industrial property supply is falling short of businesses’ demand.

Some experts said Vietnam needs timely solutions to meet logistics demand as it holds potential for developing this industry and becoming a logistic center of the region, cited VNA.

Completing transport infrastructure is also important since it will create an impulse for the logistics industry, they said, elaborating that transportation is one the decisive factors of the success of a supply chain. Businesses will seek places with completed transport infrastructure to locate their factories and warehouses to make it more conducive for transporting goods to the domestic and foreign markets.

Powell said investors in industrial real estate in Vietnam are paying more attention to the solutions helping enterprises optimising their operational efficiency. They are referring to experience in developed countries like the US, the UK, Singapore, Australia or Japan to make improvements to satisfy logistics demand.

In early 2022, Logos Property, an international logistics developer from Australia, set up a joint venture with Manulife Investment Management to develop a build-to-suit logistics project covering over 116,000sq.m. and worth over US$80 million in Dong Nai province, a major industrial center next to the country’s biggest economic hub - Ho Chi Minh City.

Supply shortages provide an opportunity for international real estate developers, Powell opined, noting that foreign capital has been flowing strongly into industrial real estate, so the shortages will soon be resolved in the coming months.

Hanoi to host festival of craft villages, streets next month

Hanoi will host a festival of craft villages and streets at the Imperial Citadel of Thang Long from October 13 – 16, aiming to promote and preserve local traditional handicrafts, according to Vice Chairman of the municipal People’s Committee Nguyen Manh Quyen.

The festival will be held annually to develop craft village-based tourism and promote cultural spaces of craft villages and streets in the capital city, Quyen said.

The event will also be a chance for traditional craftsmen and craft villages not only from Hanoi but also across the country to introduce their products and seek partnership and export opportunities, VOV reported.

Photo: VNP

It will feature around 200 booths showcasing handicrafts, divided into six zones, including one for the recreation of Hanoi’s Old Quarter in the old times, with traditional silk stores in Hang Gai Street and “Ao Dai” (Vietnamese long gown) tailor shops in Luong Van Can Street. There will be demonstration of traditional jewellery making in Hang Bac Street.

Separate zones will be set up for craft villages in Hanoi and other cities and provinces. That for Hanoi craft villages will represent various folk crafts, including pottery-making in Bat Trang, Van Phuc and Son Dong, lacquer painting in Ha Thai, buffalo horn comb making in Thuy Ung, "to he" (coloured rice dough toy) making in Xuan La and rattan and bamboo handicraft in Phu Vinh.

There will be zones for folk games and tradition cuisine of Hanoi.

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