Macro/ Strategy

A positive number beat the consensus

GDP growth in Q3 2024 is 7.4% YoY and in 9M24 is 6.82% YoY. Regarding GDP usage in 9M24, final consumption increased by 6.18% YoY, contributing 62.66% to the overall growth rate of the entire economy; accumulated assets increased by 6.68%, contribution 36.68%; export of goods and services increased by 16.94%; imports of goods and services increased by 17.05%, the difference between exports and imports of goods and services contributed 0.66%. The market consensus believed that the number would be lower than the actual number due to the impact of Typhoon Yagi. 

The impact of the typhoon was temporary

The export and import activities were hit by Typhoon Yagi. In terms of month over month comparison, the export value of September 2024 decreased by 12.5% and the import value declined by 7.7%. However, in terms of year over year comparison, the growth still maintained. The export value increased by 11.0% YoY and the import value grew by 11.5% YoY.

Vietnam’s PMI falls to 47.3 in September from 52.4 in August. Despite a disruption in production, backlogs of work continued to accumulate and manufacturers remained optimistics that the output will increase in the future. 

Manufacturing recovery led the growth

Index of industrial production (IIP) in September 2024 recorded a growth rate of 10.8% YoY. In 9M2024, IIP is estimated to increase by 8.6% YoY. The manufacturing sector increased by 9.75%; the electricity, gas sector increased by 11.11% and water supply, waste treatment sector increased by 9.83% YoY. Only mining and quarying sector decreased by 7.01% YoY. We also believe that manufacturing sector was also a driver for credit growth. The credit growth at the end of September was 8.53%.

Despite a slow pace of public investment, the plan for 2024 still keeps the same

Public investment only grew by 3.7% YoY in September and 2% YoY for 9M24, reaching 55.7% of the annual plan. Although there are only 3 months remaining, the Government has been putting a lot of effort to solve the obstacles in the public investment to reach the target of 95% of the annual plan.

Exchange rate stabilized in September but increased significantly again in October

The Vietnamese Dong only depreciated 1.2% against the US Dollar until September 2024. However, the exchange rate rose fast in October. On 23 October 2024, the Vietnamese Dong depreciated more than 4% against the US Dollar. DXY also increased from the stable level 100 at the end of September to the high level of 103 in October. The concerns, over (i) the geopolitical problems in Middle East, (ii) the result of the US presidential election and (iii) slow cutting rate from Fed, are attributable to the increase of US Dollar strength.