The bright spot in the area
According to HSBC's Global Research, after two stable quarters of reopening, Vietnam's economic recovery continues to be an outstanding example in the region. GDP growth in the second quarter of 2022 hit 7.7% year-on-year, easily exceeding market expectations (HSBC was 5.8% or other research institutions was 5.9%). . This is also the highest quarterly GDP growth Vietnam has ever achieved since 2011, thanks to a strong economic recovery across a wide range of sectors.
In particular, the service sector has made significant progress. Thanks to the lifting of important domestic and international restrictions in mid-March, tourism-related sectors, especially transportation and accommodation, have begun to flourish. Meanwhile, retail sales in the second quarter of 2022 spiked 17% year-on-year, a sign that household consumption has recovered.
Export growth in the second quarter of 2022 remained exceptionally strong.
This success is partly due to the gradual recovery of the labor market. The unemployment rate fell to 2.3% in the second quarter of 2022, while the number of jobs continued to grow close to pre-pandemic levels.
In addition, tourism is also developing strongly when summer comes. Typically, at Noi Bai and Hanoi airports, the parking lots are full, forcing the airport management departments to take many measures such as opening all lanes to check tickets to reduce traffic congestion. pine.
Most typically, scheduled flights at Noi Bai airport have doubled since the beginning of 2022, exceeding the figures recorded at the beginning of the pandemic. This is equivalent to more than 100,000 passengers per day, an increase of 40% over the same period in 2019, and also exceeds the limited capacity of 100,000 passengers of T1 terminal.
In particular, right after the reopening of the border on March 15, Vietnam welcomed a significant increase in the number of tourists. In the second quarter of 2022, Vietnam welcomed 0.5 million tourists, nearly five times more than in the first quarter of 2022. In total, in the first half of 2022, the number of visitors to Vietnam reached 0.6 million people.
Besides recovering domestic demand, Vietnam's production has affirmed its leading position, all indicators point to stable production growth. Thanks in part to a favorable base effect, industrial production (IP) in the second quarter of 2022 increased by more than 25% year-on-year. HSBC believes that this success is largely due to the continuous export of electronic shipments, reflected in trade data. Exports achieved impressive growth in the second quarter of 2022 with an increase of more than 20% over the same period.
Besides, the textile and garment and footwear and machinery industries all recorded consistent growth, proving that Vietnam's external dynamics are returning.
One bright spot that helps Vietnam to protect itself against external risks is to rely on stable FDI sources, creating a fulcrum for the basic balance. On the momentum, strong FDI inflows can offset current account deficits in previous quarters. Specifically, FDI inflows into the manufacturing sector continued to increase, reflecting investor interest and unwavering confidence in Vietnam's sustainable fundamentals.
Inflation risk still rising
Although overall growth is very positive, the energy crisis has begun to affect growth in Vietnam. According to HSBC, the impact from high energy prices is becoming more and more obvious. On the one hand, the escalation in commodity prices that led to a trade deficit in the second quarter could exacerbate the already negative current account situation. On the other hand, even though household consumption has recovered steadily, the high oil price will likely make people's pocket money less, slowing down the recovery speed in the past time. In fact, price pressures have begun to manifest, although still at a manageable level compared to other countries in the region.
Inflation continues to rise, possibly surpassing the SBV's ceiling of 4% in the second half of 2022.
HSBC believes that inflation will be able to surpass 4% from the fourth quarter of 2022 to the second quarter of 2023, requiring the State Bank to start normalizing monetary policy. It is forecasted that the State Bank will probably start to raise interest rates by 50 basis points from the third quarter of 2022 and increase by 50 basis points each quarter until the third quarter of 2023. Thus, by the end of 2023, the operating interest rate could be up to 6.5%.
“Vietnam benefits from reopening its economy. Domestic demand is returning while external dynamics continue to be favorable. However, we also need to be cautious with heightened risks to growth, especially risks from escalating energy prices,” HSBC expert emphasized.
Ha Lan
https://kinhtemoitruong.vn/kinh-te-viet-nam-duoc-du-bao-tang-truong-69-trong-nam-2022-68834.html
kinhtemoitruong
