Illustrative image (Source: VNA) The bank said in its Vietnam Macro Monitoring inFebruary that industrial production continued to grow, though at a slower paceand with mixed performance across sub-sectors while retail sales posted thefirst positive year-over-year growth rate since the COVID-19 outbreak startingin late April 2021.
Retail sales in January grew by 6.7 percentmonth-on-month and 1.3 percent year-on-year.
This recovery was fueled by strengthening consumerdemand, particularly for goods as households prepared for Tet celebration.Indeed, sales of retail sales grew by 7.0 percent month-on-month and 4.3percent year-on-year. Sales of services also increased by 5.2 percentmonth-on-month but was still 2.2 percent lower than a year ago.
Merchandise trade posted a surplus of 1.4 billion USDdespite a slowdown in exports growth. Merchandise exports growth moderated to8.1 percent year-on-year in January 2022 from 25.1 percent year-on-year inDecember 2021 while imports growth remained strong at 11.3 percentyear-on-year.
This export deceleration reflected a sharp drop inexports of phones (down 26.1 percent year-on-year) and significant slowdown inother major exports, particularly computers, electronics, and machinery.
On the other hand, growth of textiles and garmentexports remained strong, accelerating from 27.7 percent year-on-year inDecember 2021 to 34.4 percent year-on-year largely thanks to strong demand fromthe US.
By trading partners, exports to the US remainedrobust, expanding by 19.4 percent year-on-year while exports to China droppedby 15.2 percent year-on-year, reflecting the decline in exports of phones andcomputers to this market.
Vietnam attracted 2.1 billion USD of FDI commitment inJanuary, up 4.2 percent year-on-year. Growth was driven by large investment inexpansion of existing businesses, particularly in electronics and by activeM&A activities. The latter doubled in value in January 2022 compared to ayear ago, reaching over 400 million USD (or 20 percent of total FDI commitment).
Manufacturing continued to make up nearly 60 percentof total commitment, followed by real estates (22.5 percent). The disbursementof approved FDI projects continued to recover from their slump in the thirdquarter of 2021, increasing by 6.8 percent year-on-year in January 2022.
The Consumer Price Index (CPI) rose by 1.9 percent year-on-year,comparable to the rates recorded at the end of 2021.
Credit growth accelerated to meet credit demand aheadof the Tet holiday, the bank said.
According to the bank, under the new Economic RecoverySupport Programme for 2022-23 was launched in January 2022, overall plannedon-budget fiscal measures are an estimated 4.5 percent of revised GDP. The VATrate has been cut from 10 percent to 8 percent for most sub-sectors.
WB experts recommended that the programme should be enhanced through adding furthersocial protection measures to support workers and households affected by thepandemic. Additionally, close monitoring of the programme implementation wouldhelp ensure its intended impact is achieved.
Vigilance on the financial sector is also warranted,given the potential impact of the crisis on the quality of bank portfolio andthe spillover effects of the expected increases in interest rates by the US./.
VNA
