Macro/ Strategy

Manufacturing remained solid

Driven by the strong export and import growth, economic activity remained strong in August 2024. Export and import value increased by 14.5% YoY and 12.4% YoY respectively. The trade surplus reached USD 4.5bn in August, which is the highest monthly trade surplus since 2020. The manufacturing sector showed a strong growth with the increase of 10.6% YoY thanks to the strong trade growth. 

Production continued the recovery momentum in August. Remarkably, the overall IIP grew by 9.5% YoY compared to a 3.5% increase in August 2023. For the first eight months of 2024, the overall IIP increased by 8.6% compared to a decline of 0.5% YoY for the same period of 2023. Solid new orders, from S&P Global PMI report, suggested that production and exports would continue the growth from June 2024. 

Inflation eased

In August, RON95 petrol and diesel price decreased by 7.8% MoM and 8.5% MoM respectively. Thanks to the decline in petrol price, the inflation moderated. The headline inflation for the first eight months reached the SBV’s target range at 4.04%. Excluding food, electricity, education services, healthcare services and gasoline costs, core inflation increased by only 2.53% YoY. The core inflation continued the decline momentum since February 2024.

Appreciation of the Vietnamese Dong continued

The Vietnamese Dong appreciated 1.5% against the US Dollar in August 2024, which was the second consecutive month of appreciation. The gain in August was also the highest gain in the last 20 months. The appreciation could provide the room for SBV to maintain its monetary easing policy to support the economic growth.

Total retail sales growth slowed down

Due to a fading low base effect, the total retail sales grew at a slower pace, rising 7.9% YoY in August and 8.5% for the first eight months of 2024. In detail, retail sales of accommodation and catering services increased by 14.3% YoY, and retail sales of tourism services increased by 26.2% YoY. Although the growth was the slowest rate since February, the recovery of the tourism sector will support the growth of the total retail sales.

Sluggish pace of public investment remained a concern

Public investment only grew by 1.3% YoY in August and 2% YoY for the first eight months of 2024, reaching 47.8% of the annual plan. Two-thirds of the 2024 year passed, but the completion rate was still less than 50%. In August, the Prime Minister urged to accelerate the pace of public investment to meet the target of 95%, aiming to bolster the economic growth.