Vietnam Business News in Jan 2024

Capital to be prioritised for spearhead sectors: central bank

The State Bank of Vietnam (SBV) plans to enhance credit quality and allocate capital to key sectors driving economic growth in 2024. The SBV will maintain an open and flexible approach in the open market, ensuring liquidity support for the credit institution system.

KB Security Vietnam Company (KBSV) forecasts a 13-14% credit growth in Vietnam for 2024, fueled by an improved economic situation and the resolution of bottlenecks in the real estate market and enterprise bonds.

In 2023, global economic uncertainties posed challenges to Vietnam’s monetary policy, resulting in credit growth falling below expectations. Despite support measures implemented by the SBV, total credit for the economy by November 30, 2023, had only increased by 9.15% year-on-year, far from the year-end target.

SBV Deputy Governor Dao Minh Tu attributed the lower-than-expected credit growth to inefficiencies in the capital market’s mobilization channels, emphasizing the need to increase reliance on commercial banks for capital.

Despite challenges, experts, like Dr. Nguyen Xuan Thanh from the Fulbright School of Public Policy and Management, anticipate a credit expansion of 11% in 2023, with potential growth to 14-15% in 2024 to support a GDP growth of 6.5%. A loose monetary policy is recommended, with possible adjustments if faced with exchange rate and inflation pressures.

The import-export activities of Vietnam in 2023 showed signs of recovery, narrowing the decline significantly. Total export-import turnover reached an estimated $683 billion, with a trade surplus of nearly $30 billion.

However, challenges remain in 2024 due to trade protection measures and the global trend towards green production, requiring Vietnamese enterprises to address sustainability criteria. The recovery in import and export activities is expected to create momentum for breakthroughs in 2024.

Da Nang Port received its first cargo in 2024, marking the beginning of the new year. The port invested in modern equipment and infrastructure upgrades in 2023 to optimize its exploitation capacity and support the central region’s logistics needs.

The garment and textile sector faced challenges in 2023, with a 9% decline in exports compared to 2022. However, stable markets, such as Japan, Australia, and India, showed positive trends. The sector aims to overcome hurdles, reduce costs, improve quality, and explore new markets for growth.

Multidisciplinary linkages are becoming prevalent in the Vietnamese business community, particularly among medium, small, and micro-enterprises. Business associations and linkages are seen as crucial for expanding operations, reducing costs, and enhancing competitiveness.

The Vietnamese economy in 2023 demonstrated signs of recovery with a GDP growth rate of 5.05%. International organizations and economic experts anticipate positive momentum in 2024, with forecasts of 6-7% economic growth. Challenges include global economic conflicts, supply chain disruptions, and protectionist measures in major countries.

Vietnamese businesses in Berlin gathered for a New Year celebration, emphasizing their role as a bridge in Vietnam-Germany relations. The event showcased the success of Vietnamese enterprises in Berlin and their contributions to bilateral ties.

Vietnam aims to produce 1.7 million tonnes of commercial tra fish and achieve $2 billion in exports by 2024. Despite challenges in 2023, the tra fish sector is optimistic about the future, with positive signs in markets such as China, Mexico, Canada, Brazil, and the UK.

The Vietnamese government approved a project to consolidate the organizational structure, improve state management capacity, and enforce laws on digital transformation from central to local governments by 2025. The project aims to form an effective digital transformation network by 2030.

Vietnam’s industrial sector recorded 3.2% growth in added value in 2023, with processing and manufacturing contributing significantly. The index of industrial production (IIP) increased by 1.5% year-on-year, driven by sectors like plastics, chemicals, metals mining, textiles, and food production.

The National Assembly set a target for the industrial sector to contribute approximately 24.1% to Vietnam’s GDP in 2024.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes