Vietnam’s economy continues growing: WB

Hanoi (VNA) - Amid a protracted COVID-19 outbreak, socio-economic data in October showed the contraction has bottomed out and Vietnam's economy has made positive changes, the World Bank (WB) in Vietnam said in its Vietnam macroeconomic update for November released on November 12.

Illustrative image. (Photo: Duc Duy/Vietnam+)

The country's industrial production and total retail sales of consumer goods and services rebounded as economic activities gradually resumed but have yet to recover to the levels recorded before the outbreak, which began in April. Goods trade balance registered a surplus for the second month in a row as import growth continued to slow down. For the first ten months of this year, Vietnam enjoyed a trade surplus of 160 million USD. Meanwhile, the number of registered FDI decreased after three months of increase.

Despite rising fuel prices, inflation remained subdued due to falling food prices and weak domestic demand for other consumer products. Credit growth was stable in October. State budget revenue and expenditure balance returned to surplus in October mainly driven by a sharp fall in budget expenditures although revenues continued to decrease for the third month. In general, for the ten-month period, the budget surplus was a sign that tight fiscal policy would continue to be implemented.

However, exports of footwear, textiles and wooden products in October recorded a third consecutive month of decline due to labor intensity.

Meanwhile, exports of computers and electronic products as well as machinery and equipment continued to grow by 8.3% percent and 13.1 percent, respectively.

The Consumer Price Index (CPI) in October was down by 0.2 percent compared to September but rose by 1.81 percent compared to the same period last year, according to the General Statistics Office (GSO).

The CPI in the two remaining months of the year may surge as factors driving the figure down during social distancing will no longer have any impacts.

In October, food and catering services decreased by 1.28 percent from the previous month largely owing to drops of 0.25 percent and 9.38 percent in the prices of rice and pork, respectively, thanks to abundant supplies.

Housing and construction materials fell by 0.26 percent, due to a cut in housing rental rates to support people at the time when social distancing order remained in place to stamp out the spread of COVID-19.

Electricity prices were also reduced because the arrival of autumn affected demand for power and water compared to the previous month. Post and telecommunications inched down 0.04 percent.

Among eight groups of commodities and services experiencing rising prices last month, transport witnessed the highest month-on-month increase of 2.51 percent attributed to the fuel price hike.

Education inched up 0.25 percent against September.

As November-December will be a time to focus on production, travel and procurement serving for major holidays, CPI in tourism services and entertainment is projected to see growth.

The GSO also pointed out that core inflation in October saw a month-on-month decline of 0.17 percent but a year-on-year rise of 0.5 percent. In the first 10 months, the figure increased 0.84 percent compared to the same period last year, reflecting price movements driven by the hikes of food, petrol and oil and gas prices.

Core inflation in October and the first 10 months of 2021 compared to the previous year stood at the lowest level since 2011.

Meanwhile, the country’s credit growth reached 8.72 percent in October, much higher than the 6.5 percent in the same period last year.

The higher-than-expected credit growth indicates signs of economic recovery after stringent social distancing measures were lifted early last month.

In October, some 77.7 trillion VND was injected into the economy, nearly double that of the previous month. Of this, the trade and service sector received the most capital, at VND34.9 trillion, followed by the industry and construction sector with 15.6 trillion VND.

According to WB experts, Vietnam is still facing many obstacles in restarting the economy after a prolonged period of social isolation, but the positive developments observed in October showed that the situation will continue to improve, and growth will accelerate in the months to come./.