Publication: Vietnam Macro Monitoring, May 2025
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2025-07-24
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2025-07-24
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High-frequency indicators showed resilient economic activities. The Industrial Production Index (IIP) rose by 2.5 percent m/m, SA in May 2025, compared to 1.2 percent in April, supported by production growth in export-oriented sectors such as textiles and electronics. However, according to S&P Global, the fall in new export orders was broadly similar to that seen in April. While the PMI recovered from a low of 45.6 in April to 49.8- just below the 50 neutral line - in May (Figure 2), business sentiment remained low amid global uncertainty.
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“World Bank. 2025. Vietnam Macro Monitoring, May 2025. © World Bank. http://hdl.handle.net/10986/43497 License: CC BY-NC 3.0 IGO.”
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Publication Vietnam Macro Monitoring, January 2025(Washington, DC: World Bank, 2025-02-04)Industrial production increased in December 2024. The Index of Industrial Production (IIP) increased from 1.6 percent (m/m, SA) in November to 2.1 percent (m/m, SA) in December 2024, as businesses ramped up production to meet year-end consumer demand. The improvement is due to the increased production of key export products such as textiles, footwear, furniture, electronics, and electrical equipment. Manufacturing production for domestic consumption such as food and beverages also expanded. However, in terms of prospects, Viet Nam’s PMI was down from 50.8 in November to 49.8 in December, entering contractionary territory, as new orders growth slowed, while firms scaled back employment and inventories.Publication Vietnam Macro Monitoring, August 2023(World Bank, Washington, DC, 2023-09-27)This brief discusses the economic development of Vietnam for August 2023. While the export slump may have bottomed out, and domestic consumption remained resilient, credit growth continued to be slow, reflecting weak private domestic investment and investors’ confidence. Recent upward movements in global energy prices warrants close monitoring of CPI inflation. This may also prevent SBV from loosening monetary policy further. The continuation of tight global financial conditions warrants flexible FX management to accommodate external conditions. Further acceleration of public investment disbursement could support aggregate demand and economic growth in the short run while focusing on priority green and resilient infrastructure and human capital investments will help bolster long term economic development.Publication Viet Nam Macro Monitoring, April 2025(Washington, DC: World Bank, 2025-04-30)Industrial production increased by 8.6 percent y/y in March 2025, compared to 4.8 percent y/y in March 2024, driven by apparel, electronics and machinery. The PMI entered expansionary territory (50.5) in March after three months of contraction, driven by growth in new orders despite high uncertainties. Revenue collection for the first three months of 2025 reached 36.7 percent of the State budget’s annual plan compared to 31.7 percent in the same period of 2024, driven by increases in VAT and corporate income tax collection. However, the public investment disbursement rate slowed as of end of March 2025, reaching 9.5 percent of Prime Minister’s annual plan, below the 12.3 percent execution rate from the same period of last year.Publication Vietnam Macro Monitoring, September 2023(Washington, DC, 2023-10-31)This brief discusses the economic development of Vietnam for September 2023. While economic growth picked up in Q3-2023 thanks to a gradual recovery of the exports, domestic consumption remained subdued and credit growth continued to be slow reflecting weak private domestic investment and investors’ confidence. A sharp upward trend in headline inflation continues to warrant close watch. Continued efforts to implement public investment could support aggregate demand and economic growth in the short run. A strategic and well-prepared investment pipeline for 2024 and the next Medium-Term Investment Plan (MTIP) with a focus on green, resilient, and regional infrastructure will help bolster long term economic development. Further improving the business environment and stepping up investment in human capital would help the country: attract high-tech and high-value-addition FDI and boost productivity in the long run.Publication Vietnam Macro Monitoring, May 2024(Washington, DC: World Bank, 2024-07-09)Industrial production showed a significant increase, with the Index of Industrial Production (IIP) growing by 2.6 percent month-on-month (m/m) and 8.9 percent year-on-year (y/y), attributed to improved exports, particularly in manufacturing sectors. Retail sales experienced a modest recovery, growth rate indicated that consumer demand remains relatively weak. Both exports and imports experienced a surge, with exports and imports growing. The y/y growth rates were also substantial, suggesting increased demand from trade partners. Foreign Direct Investment (FDI) commitments and disbursements were solid, with the majority of FDI flowing into manufacturing and real estate sectors. Inflation rates remained stable, with the Consumer Price Index (CPI) inflation at 4.4 percent y/y and core inflation slightly moderating. The Vietnamese Dong (VND) continued to face depreciation pressure against the US Dollar (USD), and the interbank interest rates reflected a tightening of liquidity by the State Bank of Vietnam (SBV). Public revenue collection improved, but public expenditures and investment disbursements showed a slower pace. The government and SBV proposed measures to support the economy, including extending VAT reduction, reducing lending interest rates, and advancing the implementation of revised real estate laws. The report also notes that while there is a recovery in external demand, domestic demand and consumption show mixed signs. The authorities' measures aim to support the economy, but there are concerns about the impact of a strong US dollar and interest rate reductions on the exchange rate. The recommendation is to continue supporting aggregate demand through capital expenditures.
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