Illustrative image (Photo: VietnamPlus) Hanoi (VNA) – Experts of the World Bank (WB) said that accelerating public investment disbursement can support aggregate demand and economic growth in the short term while ensuring investment in human resources and green infrastructure.
In its latest update of the Vietnam Macro Monitoring report for the month of May 2023, the WB indicated that the prospect of further tightened global financial conditions requires a more flexible foreign exchange management to adapt to external conditions.
According to the report, Vietnam’s industrial production index increased marginally by 0.5% year-on-year in April.
Vietnam's Purchasing Management Index (PMI) fell to 46.7 in April from 47.7 in March, indicating that business conditions are not expected to improve in the near future.
The WB said retail sales recorded a growth rate of 11.5% year-on-year in April, on par with March.
Meanwhile, service sales continued to record a strong growth rate of 19.2% year-on-year, largely driven by the expansion of travel services (86% year-on-year) and accommodation and restaurant services (21.1% year-on-year).
According to the World Bank, retail sales recorded a growth rate of 11.5% year-on-year in April, on par with March. Meanwhile, service sales continued to record a strong growth rate of 19.2% year-on-year, largely driven by the expansion of travel services (86% year-on-year) and accommodation and restaurant services (21.1% year-on-year).
Vietnam welcomed about 1 million international arrivals in April, an increase of 10% compared to March. The number of international visitors in the first four months of 2023 reached 3.7 million, but 40% lower compared to the level before the COVID-19 pandemic.
According to experts of the WB, Vietnam needs to effectively manage foreign exchange rate to adapt to external conditions. (Photo: VietnamPlus) The report also showed that export and import values of goods decreased by 17.1% and 20.5% respectively over the same period. The drop in exports was mainly driven by a significant decline in exports of key commodities in April, including smartphones (-31%), textiles (-24%), machinery (-14%), footwear (-10%) and computers (-8%).
Expert acknowledged that consumer price index (CPI) fell from 3.4% in March to 2.8% in April. Food and foodstuffs, as well as housing and construction materials were the main drivers of CPI inflation, which increased by 3.6% and 5.2% respectively in April.
According to the WB, public investment disbursement in April increased by 16.4% compared to the same period last year, while cumulative disbursement in the first four months of the year reached 19% of the public investment plan in 2023 assigned by the Prime Minister.
WB experts assess that investment will continue to increase. (Photo: VietnamPlus)
By the end of April, the Government had issued about 140 trillion VND (about 6 billion USD) of Government bonds, accounting for 21.7% of the total borrowing plan in 2023. About 90% of the bonds issued have long terms (10-15 years).
Also in April, committed FDI reached 3.4 billion USD, up 46% from the previous month. However, the accumulated committed FDI capital in the first 4 months of the year only reached 8.8 billion USD, 17.9% lower than the same period in 2022.
Disbursed FDI in April 2023 reached 1.5 billion USD, equivalent to a year earlier. Meanwhile, accumulated disbursed FDI from January to April reached 5.8 billion USD, equivalent to the same period in 2022.
The slowdown in FDI commitments and disbursements in the first four months of the year may reflect investor caution due to global uncertainties, the report said./.
