Review of economic information week 1-5/4

The central exchange rate increased by 35 VND, the VN-Index dropped sharply by 28.98 points compared to the previous weekend, or the socio-economic situation in March 2024 continued to show a positive recovery trend... are some notable economic news in the week of April 1-5.

Economic news review

Overview

At the March 2024 Government meeting held on April 3, the Government assessed that the first quarter of 2024 would generally be better than 2023, with the following highlights:

(i) GDP growth in the first quarter reached 5.66%, higher than the same period from 2020 - 2023 and higher than the proposed scenario, all three sectors grew well: agriculture increased by 2.98%, industry and construction increased by 6.28%, services increased by 6.12%, the economic structure shifted in a positive direction (industry - construction and services dominated with 35.67% and 43.48% respectively);

(ii) the macro economy continues to be stable, inflation is controlled, major balances are ensured (trade surplus of 8.08 billion USD; energy, food, and labor supply and demand security are ensured); the consumer price index in March decreased by 0.23% compared to February, the average in the first quarter increased by 3.77% (the same period in 2023 was 4.18%; the National Assembly's target is about 4-4.5%); interest rates continue to decrease;

(iii) Exports continued to increase, large trade surplus contributed to ensuring the balance of payments, import-export turnover in March reached 65 billion USD, up 35.6% over the previous month and 12% over the same period; the total in the first quarter reached 178 billion USD, up 15.5%; of which exports increased by 17% (domestic sector increased by 26.2%, FDI sector increased by 13.9%), imports increased by 13.9%;

(iv) Service and tourism sectors recovered positively: total retail sales of goods and consumer service revenue in March increased by 9.2% over the same period; the first quarter as a whole increased by 8.2%; the number of international visitors in March reached nearly 1.6 million, up 78.6% over the same period; the first quarter as a whole reached over 4.6 million, up 72% (up 3.2% over the same period in 2019, the year before the COVID-19 pandemic);

(v) The state financial and budget situation continued to improve, with state budget revenue in the first quarter reaching 31.7% of the annual estimate, up 9.8% over the same period; public debt, government debt, national foreign debt and budget deficit were well controlled, much lower than the prescribed limit; the stock market recovered positively, with the VN-Index increasing by over 13%, transaction value increasing by 28.2%, and market capitalization increasing by 12.2% compared to the end of 2023;

(vi) Development investment continued to achieve positive results, creating momentum to promote economic growth: total social investment capital in the first quarter increased by 5.2% over the same period (in the first quarter of 2023, it increased by 3.7%); disbursement of public investment capital reached 13.67% of the annual plan, higher than the same period (10.35%), the absolute number was 16,500 billion VND higher; FDI attraction reached 6.17 billion USD, up 13.4% over the same period; realized FDI capital reached 4.63 billion USD, up 7.1% (the highest in the past 5 years);

(vii) Business development continues to increase, in March 2024, 14,100 newly registered businesses were established, an increase of 64.3% compared to February; in the first quarter, 36,200 newly registered businesses were established, an increase of 6.9% and 23,600 businesses resumed operations, an increase of 2.4% over the same period;

(viii) The survey results on business trends of manufacturing and processing enterprises are positive: 82% of enterprises assessed that the second quarter is expected to be stable and better than the first quarter of 2024; in particular, 82.9% of enterprises assessed that export orders in the second quarter are stable and increased compared to the first quarter of 2024.

However, according to the Prime Minister, our country's economy still has many shortcomings, limitations and difficulties and challenges.

Firstly, the pressure to direct and manage the macro economy, especially inflation and exchange rates, is still high due to international geopolitical risks, unpredictable fluctuations in crude oil and world food prices, and risks in international financial markets.

Second, some industrial production sectors are recovering slowly; the food and beverage service and entertainment sectors have not yet recovered clearly.

Third, production and business activities in some sectors are still facing difficulties; the number of enterprises withdrawing from the market is still large. Although the lending interest rate has decreased, the interest rate for current outstanding loans is still high; access to capital is still difficult. The implementation of the VND120,000 billion credit package for social housing is still slow. Difficulties and obstacles in the real estate market are gradually being resolved, but the recovery of transactions is still slow.

Fourth, regarding public investment, there is still 32,000 billion VND unallocated; there is a risk of lacking sand for leveling the ground for transportation projects, key works, especially in the Mekong Delta and the southern provinces,...

Regarding the main tasks and solutions in the coming time, the Prime Minister emphasized the requirement to perform at the highest and best level, striving to achieve and exceed the goals and targets in 2024, especially the growth target of about 6.5%.

Regarding the banking sector, the Prime Minister requested: Ensuring macroeconomic stability, major balances of the economy and controlling inflation, creating a foundation and favorable conditions to promote rapid and sustainable growth and development; operating a proactive, flexible, timely and effective monetary policy; coordinating synchronously, harmoniously and closely with a reasonable, focused and key expansionary fiscal policy and other policies; ensuring adequate supply of credit capital to serve the economy; closely monitoring the bad debt situation, ensuring system safety; continuing to take strong measures to further reduce lending interest rates; improving the effectiveness of bad debt handling, capacity, operational efficiency, stability and safety of the banking system; maintaining stability in the foreign exchange market and the gold market, preventing adverse fluctuations; narrowing the gap between domestic and international gold prices; striving to continue increasing state foreign exchange reserves, etc.

Domestic market summary week 1-5/4

In the foreign exchange market during the week of April 1-5, the central exchange rate was adjusted by the State Bank in an upward trend. At the end of April 5, the central exchange rate was listed at 24,038 VND/USD, a sharp increase of 35 VND compared to the previous weekend session.

The State Bank of Vietnam's transaction office continued to list the USD buying price at 23,400 VND/USD, while the USD selling price at the end of the week was listed at 25,189 VND/USD, 50 VND lower than the ceiling exchange rate.

The interbank USD-VND exchange rate during the week of April 1-5 increased sharply in the first sessions of the week and then decreased again in the last two sessions of the week. At the end of the session on April 5, the interbank exchange rate closed at 24,960 VND/USD, still up sharply by 150 VND compared to the previous weekend session.

Similar to the previous week, the USD-VND exchange rate on the free market increased sharply at the beginning of the week and then decreased again in the last two sessions of the week. At the end of the session on April 5, the free exchange rate increased by 55 VND in both buying and selling directions compared to the previous weekend session, trading at 25,435 VND/USD and 25,515 VND/USD.

In the interbank money market during the week of April 1-5, interbank VND interest rates increased sharply in the first 3 sessions of the week and then decreased again in all terms. Closing on April 5, interbank VND interest rates were trading around: overnight 2.58% (-0.20 percentage points); 1 week 2.90% (-0.10 percentage points); 2 weeks 3.23% (+0.21 percentage points); 1 month 3.75% (+0.45 percentage points).

Interbank USD interest rates fluctuated slightly upward in all terms. On April 5, the interbank USD interest rate closed at: overnight 5.25% (+0.04 percentage points); 1 week 5.31% (+0.02 percentage points); 2 weeks 5.39% (+0.04 percentage points) and 1 month 5.42% (+0.02 percentage points).

In the open market last week, in the mortgage channel, the State Bank of Vietnam bid for a 7-day term with a volume of VND55,000 billion, with an interest rate of 4.0%. There were VND8,465.53 billion in winning bids last week.

During the week, the State Bank of Vietnam offered 28-day SBV bills for auction, bidding for interest rates in 4 sessions. At the end of the week, a total of 1,600 billion VND was won, with interest rates increasing from 2.4%/year to 2.7% at the end of the week.

Thus, the State Bank of Vietnam pumped a net VND6,865.53 billion into the market last week through the open market channel, the volume of SBV bills in circulation increased to VND172,798.8 billion, the volume in circulation on the mortgage channel was at VND8,465.53 billion.

On the bond market on April 3, the State Treasury successfully mobilized VND7,095 billion/VND14,500 billion of government bonds called for auction (winning rate of 49%). Of which, the 5-year term mobilized the entire VND2,000 billion called for auction, the 10-year term mobilized VND2,500 billion/VND6,000 billion called for auction and the 15-year term mobilized VND2,595 billion/VND5,000 billion called for auction. The 5-year and 30-year terms were called for auction with VND2,000 billion and VND500 billion respectively, but there was no winning volume. The winning interest rate for the 5-year term was 1.5% (+0.03 percentage points compared to the previous auction), the 10-year term was 2.45% (+0.06 percentage points), the 15-year term was 2.65% (+0.06 percentage points).

This week, on April 10, the State Treasury offered VND10,500 billion in government bonds, of which VND2,000 billion was offered for the 5-year term, VND4,500 billion for the 10-year term, VND3,500 billion for the 15-year term, and VND500 billion for the 30-year term.

The average value of Outright and Repos transactions in the secondary market last week reached VND9,804 billion/session, a sharp decrease compared to VND14,846 billion/session of the previous week. Government bond yields last week continued to increase across all maturities. At the close of the session on April 5, government bond yields were trading around 1-year 1.78% (+0.20 percentage points compared to the previous session); 2-year 1.79% (+0.18 percentage points); 3-year 1.81% (+0.19 percentage points); 5-year 2.06% (+0.25 percentage points); 7-year 2.27% (+0.04 percentage points); 10-year 2.78% (+0.15 percentage points); 15-year 2.96% (+0.15 percentage points); 30-year 3.11% (+0.06 percentage points).

The stock market in the week of April 1-5 had negative developments, all 3 indices decreased in most sessions. At the end of the session on April 5, VN-Index stood at 1,255.11 points, down sharply by 28.98 points (-2.26%) compared to the end of the previous week; HNX-Index lost 2.90 points (-1.20%) to 239.68 points; UPCoM-Index fell 0.92 points (-1.0%) to 90.65 points.

Market liquidity increased slightly, reaching an average of nearly VND28,800 billion/session, from VND26,800 billion/session the previous week. Foreign investors continued to net sell nearly VND961 billion on all three exchanges.

International News

The US has received important economic indicators, notably the labor market remains tight. First, the Institute for Supply Management (ISM) said the US manufacturing PMI index reached 50.3% in March, up from 47.8% in the previous month and at the same time surpassing the forecast of 48.5%. This is the first time the indicator has exceeded the neutral level of 50% in 16 months, since November 2022.

In the services sector, the March PMI recorded 51.4%, down from 52.6% the previous month, contrary to expectations of a slight increase to 52.8%.

In the labor market, the US created 8.76 million job openings in February, unchanged from the previous month's 8.75 million and in line with forecasts. This is the lowest level of job openings in the US since 2022, but still much larger than the 7 million in the period when the US economy was growing steadily before the Covid-19 pandemic.

In March, the country created 303 thousand new non-farm jobs, higher than the 270 thousand in February and significantly exceeding the expected 212 thousand. The unemployment rate in the US also decreased slightly to 3.8% last month, contrary to the forecast of a flat 3.9% as in February's statistical results.

Finally, average hourly earnings in the US increased by 0.3% month-on-month in March, following a 0.2% increase in February and matching market expectations. Compared to the same period in 2023, current earnings increased by about 4.1%. After the above information was released, CME's tool forecasted the possibility of the Fed cutting the policy interest rate in June to only about 53.2%, down sharply from the previous 61%, and the rate of the Fed leaving the policy interest rate unchanged increased to 46.8%. This week, the market will continue to wait for information on the US headline CPI and core CPI for March, announced on the evening of April 10, Vietnam time.

The Eurozone also recorded several notable indicators last week. First, on inflation, the European Union's statistical office Eurostat said that the headline CPI and core CPI in the Eurozone rose by 2.4% and 2.9% year-on-year in March, down from 2.6% and 3.1% in the previous month, and both lower than the forecast of 2.5% and 3.0%. This was the lowest month of inflationary pressure in the region since March 2022.

In Germany in particular, the headline CPI in March increased by 2.2%, also the lowest level since April 2021. Next, in terms of the labor market, the unemployment rate in the Eurozone in February was recorded at 6.5%, unchanged from the previous month's statistics and contrary to forecasts, a slight decrease to 6.4%.

Finally, retail sales in the Eurozone fell 0.5% in February after being flat the previous month (0.0% m/m), deeper than the forecast 0.3% decline. Compared to the same period in 2023, retail sales in the region fell 0.7%.

This week, the world awaits information about the European Central Bank (ECB) meeting. The results of the meeting will be announced on the evening of April 11, Vietnam time. The market predicts that the ECB will keep its policy interest rate (refinancing rate) unchanged at this meeting.

Source link: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-tuan-1-54-150598.html