KTFA: Vietnam:
Henig: Seeking driving force for 2023 economic growth
06:00 | 01/02/2023
(VEN) – On the threshold of the New Year, economist Dr. Nguyen Dinh Cung, former director of the Central Institute for Economic Management, sums up the Vietnamese economy’s 2022 results and provides his forecast for 2023 growth.
Growth exceeds forecast
In 2022, the positive growth of the Vietnamese economy exceeded the forecasts of domestic and foreign economists and organizations. In the first three quarters of the year, Vietnam’s gross domestic product (GDP) increased 8.83 percent compared with the same period of 2021 – the highest nine-month GDP growth since 2011. Notably, in the third quarter, according to data from the General Statistics Office of Vietnam, the GDP grew 13.67 percent year-on-year.
The 2022 annual GDP growth was forecast to reach eight percent, exceeding the 6.5 percent target set by the National Assembly and the Government.
Vietnam’s 2022 economic growth was attributed first of all to the Government’s management efforts. Notably, Vietnam received global recognition for its flexibility in coping with the COVID-19 pandemic and vaccinations. In October 2021, the Government issued Resolution 128/NQ-CP on safe and flexible adaption to COVID-19, reopening the economy for recovery and resuming growth.
In 2022, the Government also maintained macroeconomic stability. In the context of unprecedented inflation in many countries, Vietnam successfully curbed the inflation rate at below four percent. The participation in new-generation free trade agreements (FTAs) has helped Vietnam maintain and even increase exports despite the impact of China’s Zero COVID policy on exports to this market. The 2022 annual import-export value is predicted to reach US$700 billion, a new record compared with US$668.5 billion in 2021.
However, the impressive economic growth of the first three quarters of 2022, especially the third quarter, can hardly be maintained in 2023 and ensuing years. In the fourth quarter of 2022, Vietnam’s GDP growth slowed down. To achieve the 6.5-percent growth target set by the National Assembly for 2023, the Government, ministries and localities should take timely and flexible measures in response to changes in the domestic and global economic situation.
Driving force for 2023 growth
To maintain macroeconomic stability in 2023, Vietnam is pursuing the goal of curbing inflation at below 4.5 percent. However, inflation control requires tightened fiscal and monetary policies, which will hinder business access to capital resources for production expansion. Therefore, flexible inflation control is necessary to promote economic growth in 2023.
The business community contributes significantly to Vietnam’s economic growth. To facilitate business operations, the government, ministries and localities should further improve the investment and business environment, restrict inspections and create favorable conditions for business access to loans with low interest rates. Reducing land rent and taxes for businesses through the Government’s Economic Recovery and Development Program is one of the measures to help Vietnam maintain economic growth in 2023 and ensuing years.
Notably, it is necessary to accelerate public investment disbursement due to its heavy impact on the entire economy, the liquidity of credit institutions and business access to capital resources.
The 2022 annual GDP growth was forecast to reach eight percent, exceeding the 6.5 percent target set by the National Assembly and the Government.
Nguyen Hoa LINK
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Henig: Mong Cai international border gate busy after Tet holiday
10:52 | 01/02/2023
Import-export activities at the Mong Cai International Border Gate have turned busy as the border gate reopened on January 28 after 7-day closure for Lunar New Year (Tet) celebration.
Only on the morning of January 28, 120 vehicles carrying more than 600 tonnes of products and container trucks carrying electronic items traversed the border gate.
Head of the Mong Cai International Border Gate Management Board Tran Bich Ngoc said that in the first 30 days of 2023, nearly 73,500 tonnes of products were traded via the border gate, a year-on-year increase of 13.5 percent.
At the Bac Luan Bridge II border gate in the Mong Cai International Border Gate, on average 94 vehicles with about 1,500 tonnes of import and export goods traversed daily.
At the opening of Km3 4 Hai Yen, an average of 147 vehicles with nearly 1,900 tons of goods are cleared daily.
Exports from Vietnam to China are mainly fruits, tapioca, aquacultural products, and dry goods.
Imports from China to Vietnam are mainly fabrics and electronic components.
From January 8 when China reopened its borders, the number of people entering and leaving Vietnam through the Mong Cai border gate has reached 5,361. Of the total, 889 people, most of them Vietnamese, entered while 4,472 people, mostly Chinese, left the country.
Source: VNA LINK
Henig: State-owned banks under capital increase pressure
10:52 | 01/02/2023
Vietnam’s four biggest State-owned banks have an urgent need for capital increase in 2023 as their charter capital is too low, with some unable to ensure the regulated minimum capital adequacy ratio (CAR), according to industry insiders.
Currently, the big four, including BIDV, Vietcombank, Agribank and VietinBank, only hold more than 40 percent of the credit market share of the country’s banking system, but over the years, especially in the past three years, the banks have been a key force in supporting the economy to overcome the difficulties caused by the COVID-19 pandemic and global economic uncertainties. However, they are facing difficulties in terms of capital.
According to Agribank’s chairman Phạm Đức Ấn, at the current credit scale, Agribank is unable to ensure the minimum CAR to get higher credit growth due to the low charter capital, which caused the bank to have a low credit growth in 2022 compared to the average rate of the banking system.
Increasing charter capital for Agribank is very urgent as only when the minimum CAR is ensured for developing credit right from the beginning of 2023, Agribank has the resources to serve the capital needs of the economy, especially in rural areas, Ấn noted, suggesting that the Government should advance the VND6.75 trillion of charter capital for Agribank as an estimated plan approved by the National Assembly.
Despite having a proactive advantage over Agribank, the three remaining State-owned banks still have to wait for the Government’s approval in order to raise capital as expected. There are many potential risks for the three banks as their CAR is currently just slightly above the regulated minimum. Therefore, BIDV’s chairman Phan Đức Tú requested the Government, the Ministry of Finance and the SBV continue allowing State-owned banks to use their after-tax profits after deducting funds in 2022 to increase charter capital in a move to enhance their financial resources and ensure the CAR.
For Vietcombank, though the bank has taken many measures to increase charter capital, its CAR is still very modest compared to its development needs as well as international standards. The bank’s chairman Phạm Quang Dũng proposed the Government and the SBV continue to give priority to the charter capital increase of State-owned banks.
Vietcombank is looking forward to soon being approved by the Prime Minister to increase its charter capital from the retained profits in 2019 and 2020 after deducting funds, which has been agreed by the SBV and the Ministry of Finance to submit to the Prime Minister. In 2023, Vietcombank plans to ask the SBV to submit to the bank’s general meeting of shareholders to further increase its charter capital from all the remaining accumulated profits in 2021 and the previous years.
As the Prime Minister, the SBV and the Ministry of Finance have so far agreed on the proposal in principle, Vietcombank expects to receive support from the Government, the SBV and relevant ministries in the process of reporting, explaining and applying for approval of the proposal from the National Assembly, Vietcombank’s chairman Phạm Quang Dũng said.
According to statistics, as of October 2022, the CAR of the State-owned banks was only 9.04 percent, much lower than that of other regional countries, such as the Philippines (16.29 percent), Singapore (17.2 percent), Malaysia (18.3 percent), Thailand (19.3 percent) and Indonesia (23.3 percent). Moreover, many countries in the region have so far applied Basel III, or a part of Basel III, while banks in Vietnam have mostly implemented Basel II. The low CAR will affect the credit supply of the State-owned banks, which will limit their support to businesses, especially when the economy is facing many potential risks. Notably, if the shortcoming is prolonged, it will be difficult for State-owned banks to maintain their dominant positions in the banking system.
A banking expert even said if considering the State budget as an investment, investing in State-owned banks will get the best return as they have been steadily profitable and annually contributed trillions of Vietnamese dong in tax to the State budget.
Source: VNS LINK
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Henig: Vietnam plans to attract Chinese tourists
07:00 | 01/02/2023
Vietnam’s tourism industry has targeted to serve about 110 million tourists in 2023, including 8 million foreign visitors.
On January 8, China officially completely lifted travel restrictions to the world, allowing its visitors to travel to international destinations after three years of closure. This will likely open up a strong recovery momentum shortly for the tourism industry of countries around the globe.
According to the World Tourism Organization, Chinese tourists are the world’s largest spenders, accounting for a fifth of global tourism spending in 2019 – the time before the outbreak of the COVID-19 pandemic. This is equal to the US and German tourist markets combined.
Viet Nam’s smokeless industry also looks forward to visitors from the billion-population market.
According to a report by the National Administration of Tourism, China has always been Viet Nam’s largest market, with more than 5.8 million visitors to our country in 2019, accounting for one-third of the total number of international visitors to Viet Nam.
In Quang Ninh province, the local Department of Tourism said that Chinese visitors through Mong Cai international border gate were increasing daily. The number of Chinese tourists staying in Quang Ninh also accounts for about 50 percent of total international visitors to Quang Ninh.
The National Administration of Tourism said that the adjustment of the immigration and epidemic prevention policy by Chinese authorities from January 8 is a positive signal for Viet Nam’s tourism industry in the early days of 2023.
In 2015-2019, Chinese tourists increased by an average of 34.4 percent per year. Before the epidemic, Chinese tourists always accounted for 30 percent of the total number of international visitors to Viet Nam.
Not only do Chinese tourists return, but the travel demand of tourists from other international markets and domestic tourists also increases during Tet. Therefore, localities actively prepare and offer many unique tourism products to attract tourists.
In just three days of the last New Year holiday, Sapa has welcomed approximately 42,000 tourists. Revenue was about VND126 billion, an increase of over VND80 billion compared to the previous year’s period.
It is forecasted that this Lunar New Year, Sa Pa will continue to receive many visitors thanks to bustling festivals and cultural and entertainment events.
Source: en.baochinhphu.vn LINK
