The central exchange rate decreased by 49 VND, the VN-Index increased by 26.87 points compared to the previous weekend session, or the country's GDP in the fourth quarter of 2023 is estimated to increase by 6.72% over the same period last year... are some notable economic information in the week from December 25-29, 2023.
| Economic news review on December 27 Economic news review on December 28 |
 |
| Economic news review |
Overview
GDP growth for the whole year of 2023 did not reach the target set in the 2023 Socio-Economic Development Plan and Resolution 01/NQ-CP of the Government, inflation was controlled at an appropriate level.
According to the report of the General Statistics Office (GSO), the country's GDP in the fourth quarter of 2023 is estimated to increase by 6.72% over the same period last year, higher than the fourth quarters of 2012-2013 and 2020-2022, and with a positive trend, the following quarter is higher than the previous quarter (the first quarter increased by 3.41%, the second quarter increased by 4.25%, the third quarter increased by 5.47%). Of which, the agriculture, forestry and fishery sector increased by 4.13%, contributing 7.51% to the total added value of the whole economy; the industry and construction sector increased by 7.35%, contributing 42.58%; the service sector increased by 7.29%, contributing 49.91%.
With the increase achieved in the fourth quarter of 2024, GDP in 2023 is estimated to increase by 5.05% over the previous year, only higher than the growth rates of 2020 and 2021 in the 2011-2023 period. In the total added value increase of the whole economy, the agriculture, forestry and fishery sector continues to be the pillar of the economy, increasing by 3.83%, contributing 8.84%; the industry and construction sector increased by 3.74%, contributing 28.87%; the service sector increased by 6.82%, contributing 62.29%.
In the industrial and construction sector, the industry faces many difficulties and challenges in the context of declining global aggregate demand. The added value of the entire industry in 2023 increased by only 3.02% over the previous year, the lowest increase in the years in the period 2011-2023, contributing 1.0 percentage point to the growth rate of total added value of the entire economy. Of which, the processing and manufacturing industry increased by 3.62%, the lowest increase in the years in the period 2011-2023, contributing 0.93 percentage points. Trade and tourism activities maintained high growth momentum, contributing positively to the growth of the service sector. The added value of the service sector in 2023 increased by 6.82% over the previous year, higher than the increase of 2.01% and 1.75% in the years 2020-2021.
According to experts, although Vietnam's GDP in 2023 did not reach the set target, it can be said to have increased quite a bit based on the very high growth base of 2022 (up 8.12%). Moving into 2024, it can be seen that Vietnam has 4 main growth drivers including production and export recovery, increased domestic consumption demand, real estate market recovery and the return of private investment growth.
At the 6th Session, the 15th National Assembly approved the 2024 Socio-Economic Development Plan with a GDP growth target of 6.0% - 6.5%. According to GSO experts, for GDP to increase by 6% - 6.5% in 2024, the agriculture, forestry and fishery sector is expected to increase by about 3% - 3.2%, 0.63 - 0.8 percentage points lower than in 2023; the industry and construction sector will increase by 6.2% - 6.9%, 2.46 - 3.16 percentage points higher; the service sector will increase by 6.7% - 7.1%, 0.28 percentage points higher. These are not easy increases to achieve when the agriculture, forestry and fishery sector has increased very high in 2023 and the remaining sectors are forecast to face many difficulties in the year.
Regarding the consumer price index (CPI) in 2023, according to GSO, the average CPI in the fourth quarter of 2023 increased by 3.54% compared to the fourth quarter of 2022. For the whole year of 2023, the CPI increased by 3.25% compared to the previous year, achieving the target set by the National Assembly. Specifically, the CPI in December 2023 increased by 0.12% compared to the previous month. Compared to the same period last year, the CPI in December increased by 3.58%. In the 0.12% increase in the CPI in December 2023 compared to the previous month, there were 10 groups of goods and services with increased price indexes and 01 group of goods with decreased price indexes.
The average CPI in 2023 increased compared to the previous year due to the following main reasons: (i) The price index of the education group increased by 7.44% (causing the general CPI to increase by 0.46 percentage points) due to some localities increasing tuition fees for the 2023-2024 school year according to the roadmap of Decree No. 81/2021/ND-CP; (ii) the price index of the housing and construction materials group increased by 6.58% (causing the general CPI to increase by 1.24 percentage points), due to the increase in cement and sand prices following the input material prices, along with the high increase in housing rental prices; (iii) the price index of the food group increased by 6.85% (causing the general CPI to increase by 0.25 percentage points); (iv) the price index of household electricity group increased by 4.86% (causing the general CPI to increase by 0.16 percentage points) due to increased electricity demand and from May 4, 2023 and November 9, 2023, Vietnam Electricity Group adjusted the average retail electricity price; (v) the price index of beverage and tobacco group increased by 3.29% (causing the general CPI to increase by 0.09 percentage points); (vi) the price index of medicine and medical services group in 2023 increased by 1.23% due to the adjustment of medical service prices according to Circular No. 22/2023/TT-BYT of the Ministry of Health from November 17, 2023; (vii) The price index of other goods and services increased by 4.65% (causing the CPI to increase by 0.16 percentage points), mainly due to the increase in health insurance services from July 2023 according to the new basic salary.
In addition, there are a number of factors contributing to restraining the CPI growth rate in 2023: (i) the domestic gasoline price index in 2023 decreased by 11.02% compared to 2022 according to fluctuations in world prices, causing the overall CPI to decrease by 0.4 percentage points; kerosene decreased by 10.02%; (ii) the gas price index decreased by 6.94% compared to 2022, causing the overall CPI to decrease by 0.1 percentage points; (iii) the postal and telecommunications price index decreased by 0.81% compared to the previous year due to the decrease in prices of old-generation mobile phones.
Core inflation in December 2023 increased by 0.17% compared to the previous month and by 2.98% compared to the same period last year. On average, core inflation in 2023 increased by 4.16% compared to 2022, higher than the average CPI increase of 3.25%. The main reason is that the average domestic gasoline price in 2023 decreased by 11.02% compared to the previous year, and the gas price decreased by 6.94%, which is a factor that restrains the CPI growth rate but is a group of goods excluded from the list of core inflation calculations.
Forecasting inflation for 2024, experts said that there are factors to control inflation such as: proactiveness and abundant supply of food and foodstuffs - a group of goods that accounts for a large proportion of people's consumption expenditure; global inflation cooling down, gradually moving towards the target inflation rate, reducing the pressure to "import" inflation; expected inflation decreasing; along with the fact that aggregate consumer demand has not completely improved. Therefore, the target of controlling inflation in 2024 from 4% - 4.5% approved by the National Assembly is considered feasible.
Domestic news
In the foreign exchange market during the week of December 25-29, the central exchange rate was adjusted up and down sharply by the State Bank of Vietnam through the sessions. At the end of December 29, the central exchange rate was listed at 23,866 VND/USD, down sharply by 49 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 25,009 VND/USD, 50 VND lower than the ceiling exchange rate.
The interbank USD-VND exchange rate also fluctuated up and down over the sessions last week. At the end of the session on December 29, the interbank exchange rate closed at 24,250 VND/USD, up 15 VND compared to the session at the end of the previous week.
The dollar-dong exchange rate on the free market increased last week. At the end of the session on December 29, the free exchange rate increased by 170 VND for buying and 120 VND for selling compared to the previous weekend session, trading at 24,720 VND/USD and 24,770 VND/USD.
In the interbank money market from December 25 to 29, interbank VND interest rates fluctuated strongly in all terms. Closing on December 29, interbank VND interest rates were traded around: overnight 3.60% (+3.31 percentage points); 1 week 3.28% (+2.60 percentage points); 2 weeks 2.94% (+1.64 percentage points); 1 month 2.56% (+0.96 percentage points).
Interbank USD interest rates fluctuated slightly up and down across all terms. At the end of the week, December 29, the interbank USD interest rate closed at: overnight 5.08% (+0.02 percentage points); 1 week 5.17% (-0.02 percentage points); 2 weeks 5.27% (-0.01 percentage points) and 1 month 5.37% (-0.01 percentage points).
In the open market from December 25-29, on the mortgage channel, the SBV bid for 7-day terms, and on December 25 for 14-day terms, with a volume of VND14,000 billion, the interest rate was 4.0%. There was VND4,551.36 billion in winning bids in the last session of the week. Thus, the SBV net injected VND4,551.36 billion into the market last week.
Last week, the State Bank continued not to bid for State Bank bills, and there were no more bills circulating on the market.
On the bond market on December 27, the State Treasury called for bids of VND4,500 billion in government bonds. Of which, VND1,798 billion was won, reaching a rate of 40%, including the 10-year term winning bid of VND1,018 billion/VND1,500 billion bid and the 30-year term winning bid of VND780 billion/VND1,000 billion bid. The 5-year and 15-year terms called for bids of VND500 billion and VND1,500 billion respectively, however, there was no winning volume in either of these terms. The issuance interest rates for the 10-year and 30-year terms were 2.20% and 3.0% respectively, both down 0.05 percentage points compared to the most recent winning bid.
This week, on January 3, the State Treasury offered VND5,000 billion in government bonds, of which VND500 billion was offered for 5-year and 30-year terms, and VND2,000 billion for 10-year and 15-year terms.
The average value of Outright and Repos transactions in the secondary market last week reached VND17,770 billion/session, a sharp increase compared to VND14,490 billion/session the previous week. Government bond yields last week tended to decrease slightly in short terms while increasing slightly for terms of 7 years or more.
At the close of the session on December 29, government bond yields were trading around 1-year 1.55% (-0.003 percentage points); 2-year 1.56% (-0.002 percentage points); 3-year 1.57% (-0.002 percentage points); 5-year 1.53% (unchanged); 7-year 1.94% (+0.05 percentage points); 10-year 2.24% (+0.02 percentage points); 15-year 2.44% (+0.02 percentage points); 30-year 3.01% (unchanged).
The stock market in the week of December 25-29 had positive developments in most sessions. At the end of the session on December 29, VN-Index stood at 1,129.93 points, up 26.87 points (+2.44%) compared to the previous weekend; HNX-Index added 2.77 points (+1.21%) to 231.04 points; UPCoM-Index increased 0.90 points (+1.04%) to 87.04 points.
Average market liquidity reached over VND17,200 billion/session, similar to the previous week's level. Foreign investors continued to net sell nearly VND380 billion on all three exchanges.
International News
The US recorded some notable economic indicators. First, on the labor market, the number of initial jobless claims in the US in the week ending December 23 was 218 thousand, up from 206 thousand the previous week, and higher than the forecast of 211 thousand. The average number of claims in the last 4 weeks was 212 thousand, down slightly by 0.25 thousand compared to the previous 4 weeks.
In the real estate market, pending home sales in the US were flat in November 2023 (0.0% compared to the previous month) after falling 1.2% in October, contrary to the forecast of a 0.8% recovery. Compared to the same period in 2022, November sales decreased by about 5.2%. In addition, the US Federal Housing Finance Agency (FHFA) said that the country's home price index increased by 0.3% m/m in October, following the previous month's 0.7% increase and lower than the forecast of 0.5%. Compared to the same period in 2022, home prices in this country recorded an increase of 6.3%, much wider than the 5.5% recorded in September.
Next, in terms of trade, the country's import-export balance posted a deficit of $90.3 billion in October, larger than the $89.6 billion deficit in September and also larger than the $88.6 billion deficit forecast. Finally, the Chicago Institute for Supply Management (ISM) survey said that the city's PMI index only reached 46.9 points in December, down sharply from 55.8 points in November and deeper than the forecast of 50.1 points (Chicago is the third most populous city in the US).
Japan also received important economic indicators last week. First, regarding the labor market, the unemployment rate in Japan remained at 2.5% in November, unchanged from the statistical results in October.
Next, on inflation, the Bank of Japan (BoJ) announced that the country's core CPI rose only 2.7% year-on-year in November, contrary to the forecast of a 3.0% increase as in the previous month. This is the lowest core CPI increase since March 2023, and also shows a sharp deceleration since the peak of 3.4% recorded in September.
Retail sales in Japan rose 5.3 percent year-on-year in November, up from a 4.1 percent increase in October and beating analysts' expectations of a 5.1 percent gain.
In the construction sector, housing starts in Japan showed a sharp 8.5% year-on-year decline in November, larger than the 6.3% decline recorded in October and also larger than the forecast 4.2% decline.
Finally, industrial output in the country fell slightly by 0.9% month-on-month in October after rising 1.3% in September, less than the forecast 1.7% decline. Compared to the same month in 2022, November output recorded a 1.4% decline.
Source link
Comment (0)