Business News in Vietnam on May 18, 2024

Consumer confidence in Vietnam’s economic progress has reached a five-quarter high, driven by a positive economic outlook and strong GDP growth in the first quarter of 2024. The report by Kantar Worldpanel Vietnam indicates that concerns about household incomes have eased, but worries about rising living costs, particularly due to proposed electricity price increases, have emerged.

Despite improved consumer confidence, the first quarter of 2024 saw a subdued performance in take-home fast-moving consumer goods (FMCG) despite a boost from the Tet 2024 holiday. Both urban and rural areas experienced a decline in FMCG volume, primarily driven by the food and beverage sectors. Alcoholic beverage sales accounted for a significant portion of the FMCG loss, followed by dairy and packaged foods.

Online retail gained significant short-term retail value share in the first quarter of 2024, positioning itself as the future driver of FMCG expansion. Large provisions stores and specialty stores in rural areas have been growing in prominence over the years.

In addition, the Export Development Canada (EDC) has highlighted Vietnam as a rising star in the Indo-Pacific region, with strong economic growth and a commitment to economic reform and liberalization. The EDC is set to open an office in Vietnam in fall 2024 to double the amount of trade from Canada to Vietnam in the next five years.

The stock market in Vietnam is experiencing an upward momentum, driven by improved liquidity and positive Q1 results. Experts are cautiously optimistic about increased cash flow and predict further growth in the market.

Vietnam’s seafood exports have increased by 6% in the first four months of the year, with shrimp exports reaching the highest amount since the start of the year. The US is considering recognizing Vietnam as having a market economy status, which could remove trade barriers for Vietnamese shrimp exporters.

In the banking sector, a number of domestic banks are planning to restructure distressed zero-VND banks to facilitate expansion activities. While the process is fraught with risks, including rising non-performing loans, banks like VPBank and Vietcombank are actively involved in the restructuring efforts.

Overall, Vietnam’s economic outlook remains positive, with opportunities for growth and investment in various sectors, including logistics, e-commerce, agriculture, and trade. The country’s strong economic performance and commitment to reform make it an attractive destination for foreign investors and businesses looking to expand their presence in the region.