Review of economic information from January 6-10

The central exchange rate increased by 7 VND, the VN-Index decreased by 24.11 points compared to the previous weekend, or the Government's assessment that the socio-economic situation in 2024 will recover positively, achieving many important results... are some notable economic information in the week from January 6-10.

Economic news review

Overview

At the regular Government meeting in December 2024 held on January 8, 2025, the Government assessed that the socio-economic situation in 2024 will recover positively, with each month being better than the previous month, each quarter being higher than the previous quarter, and the whole year achieving many important results, higher than in 2023 in most areas, not only achieving but basically exceeding all 15/15 main targets. Specifically:

(1) GDP in 2024 is estimated to increase by 7.09%, among the few countries with high growth in the world. This rate is only lower than the growth rates in 2018, 2019 and 2022 over the past 15 years. This rate is also higher than the forecasts made by many international organizations previously. All three sectors of agriculture, forestry, fishery, industry and services maintained positive growth momentum; total retail sales of goods and consumer service revenue in 2024 increased by 9.0% over the previous year.

(2) The macro economy is basically stable, major balances are ensured, and inflation is controlled. On average, core inflation will increase by 2.71% in 2024, lower than the average CPI increase, in the context of salary increase from July 1 and price adjustment of some services.

(3) Import and export is the bright spot of 2024. For the whole year, the total import and export turnover of goods reached 786.29 billion USD, although it did not reach the expected figure of 800 billion USD, it increased by 15.4% compared to the previous year; for the whole year, the trade surplus was 24.77 billion USD.

(4) Tourism recovers strongly. International visitors in 2024 will reach nearly 17.6 million, an increase of 39.5% compared to 2023 and equal to 97.6% of 2019 - the year before the Covid-19 pandemic.

(5) The balance of state budget revenue and expenditure is guaranteed. Total state budget revenue in 2024 is estimated to reach over VND 2,030 trillion, up 19.8% compared to the estimate, up 16.2% compared to the implementation in 2023. Public debt, government debt, and budget deficit are much lower than the target allowed by the National Assembly.

(6) Production and business activities and FDI attraction have achieved many positive results. Total social investment capital in 2024 is estimated to reach over 3.69 million billion VND, an increase of 7.5% compared to 2023. Although the total registered foreign investment capital in Vietnam as of December 31, 2024 only reached 38.23 billion USD, down 3.0% over the same period last year, the realized capital of FDI projects is estimated at 25.35 billion USD, an increase of 9.4% compared to 2023, reaching the highest level since 2020.

(7) The business development situation has changed positively. In 2024, more than 233,000 businesses entered and re-entered the market, 1.2 times the number of businesses withdrawing from the market. The number of businesses returning to operation in 2024 reached an all-time high of over 76,000 businesses. However, the number of newly registered businesses in 2024 decreased by 1.4% compared to 2023, with total registered capital decreasing by 1.8%.

(8) Infrastructure development was strongly promoted, with clear breakthroughs, especially in transport and electricity infrastructure. An additional 109 km of expressways were put into operation, bringing the total length of expressways nationwide to more than 2,021 km. Many key power source and grid projects were seriously and rapidly implemented, such as the 500 kV Project, Circuit 3, Quang Trach - Pho Noi, completed after more than 6 months.

(9) Resolutely implement the work of perfecting institutions and laws. The Government submitted to the National Assembly for approval 31 laws and 42 resolutions; chaired and coordinated with the National Assembly Standing Committee to organize online conferences to disseminate and implement a number of laws and resolutions in 63 localities, innovated the way of bringing laws and resolutions into life...

The Government believes that the positive results achieved in 2024 are an important premise for 2025, when the economy is expected to make a breakthrough to complete the targets in the 5-year Socio-Economic Development Plan 2021-2025.

Domestic market summary from January 6-10

In the foreign exchange market from January 6 to 10, the central exchange rate continued to be adjusted up and down by the State Bank. At the end of January 10, the central exchange rate was listed at 24,341 VND/USD, up 7 VND compared to the previous weekend session.

The State Bank of Vietnam continues to list the spot buying rate at 23,400 VND/USD and the spot selling rate at 25,450 VND/USD.

The interbank USD-VND exchange rate during the week of January 6-10 continued to fluctuate between increases and decreases, although the downward trend prevailed. At the end of the session on January 10, the interbank exchange rate closed at 25,350, down another 55 VND compared to the session at the end of the previous week.

The dollar-dong exchange rate in the free market decreased slightly last week. At the end of the session on January 10, the free exchange rate decreased by 45 VND in both buying and selling directions compared to the previous weekend session, trading at 25,655 VND/USD and 25,755 VND/USD.

In the interbank money market from January 6-10, interbank VND interest rates increased quite strongly in short terms. Closing on January 10, interbank VND interest rates were traded at: overnight 4.76% (+0.76 percentage points); 1 week 4.91% (+0.56 percentage points); 2 weeks 4.97% (+0.49 percentage points); 1 month 5.14% (-0.01 percentage points).

Interbank USD interest rates decreased slightly in all terms of 1 month or less last week. On January 10, interbank USD interest rates were: overnight 4.40% (-0.03 percentage points); 1 week 4.48% (-0.02 percentage points); 2 weeks 4.55% (-0.04 percentage points) and 1 month 4.60% (-0.01 percentage points).

In the open market from January 6-10, in the mortgage channel, the State Bank of Vietnam offered a 7-day term with a volume of VND55,000 billion, the interest rate remained at 4.0%. There were VND54,999.88 billion in winning bids and VND73,986.12 billion maturing last week in the mortgage channel.

SBV bids for treasury bills SBV bids for interest rates in 02 terms of 7 days and 14 days. There were 68,750 billion VND won in both terms, interest rates were both at 4.0%. There were 35,140 billion VND of treasury bills maturing last week.

Thus, the State Bank of Vietnam net withdrew VND52,596.24 billion from the market last week through the open market channel. There were VND54,999.88 billion circulating on the mortgage channel, and VND87,530 billion of State Bank of Vietnam bills circulating on the market.

In the bond market, on January 8, the State Treasury successfully bid for VND323 billion/VND6,500 billion of government bonds called for bid (winning rate reached 5%). Of which, the 10-year term mobilized VND176 billion/VND3,500 billion of bid, the 15-year term mobilized VND140 billion/VND1,000 billion of bid and the 30-year term mobilized VND7 billion/VND500 billion of bid. The 5-year term called for bid of VND1,500 billion but there was no winning volume. The issuance interest rate for the 10-year term was 2.77% (unchanged compared to the previous auction), the 15-year term was 2.95% (+0.09 percentage points), the 30-year term was 3.22% (unchanged).

This week, on January 15, the State Treasury plans to bid for VND6,000 billion in government bonds, of which VND1,000 billion will be offered for the 5-year term, VND3,500 billion for the 10-year term, VND1,000 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 VND 7,785 billion/session, a sharp decrease compared to VND 15,186 billion/session of the previous week. Government bond yields last week continued to increase slightly across all maturities. At the close of the session on January 8, government bond yields were trading around 1-year 1.98% (+0.002 percentage points compared to the session at the end of last week); 2-year 2.01% (+0.01 percentage points); 3-year 2.05% (+0.02 percentage points); 5-year 2.36% (+0.06 percentage points); 7-year 2.64% (+0.10 percentage points); 10-year 3.03% (+0.05 percentage points); 15-year 3.18% (+0.03 percentage points); 30 years 3.29% (+0.01 percentage point).

The stock market continued to be negative in the week of January 6-10, especially falling sharply in the last two sessions of the week. At the end of the session on January 10, VN-Index stood at 1,230.59 points, down sharply by 24.11 points (-1.92%) compared to the previous weekend; HNX-Index lost 6.14 points (-2.73%) to 219.49 points; UPCoM-Index fell 2.19 points (-2.32%) to 92.15 points.

Average market liquidity reached nearly VND11,900 billion/session, still down from VND12,500 billion/session the previous week. Foreign investors continued to net sell over VND327 billion on all three exchanges.

International News

The US Federal Reserve (Fed) released the minutes of its 2024 year-end meeting, and the US received many indicators showing that the labor market is quite positive. Regarding the Fed, in the minutes released on January 9, Vietnam time, the agency assessed that the US economy is growing at a moderate and stable pace. Inflation has decreased significantly compared to the peak from 2022 but remains high.

The labor market has tightened but is not showing signs of rapid deterioration, and the unemployment rate remains low. The Federal Open Market Committee (FOMC) remains committed to its goals of maximum employment and stable inflation of 2 percent over the longer term. Accordingly, the agency decided to lower the policy rate by 25 basis points, from 4.50% - 4.75% to 4.25% - 4.50% to support these goals. The FOMC will continue to carefully evaluate incoming data to make further decisions.

Regarding the US economy, in the labor market, the country created 256 thousand new non-agricultural jobs in December, higher than the 212 thousand in November and much higher than the forecast of 164 thousand. The unemployment rate last month also decreased to 4.1% instead of remaining flat at 4.2% as forecast. Average hourly earnings in the US in the last month of 2024 increased by 0.3% compared to the previous month, following the increase in the previous month, matching the forecast of experts.

Earlier, the US Department of Labor also announced that the country created 8.10 million new jobs in November, higher than the previous month's 7.84 million and higher than the forecast of 7.73 million. The number of initial unemployment claims in the US in the week ending January 3 was 201 thousand, down from 211 thousand the previous week and contrary to the forecast of a slight increase to 214 thousand. The average number of applications for the most recent 4 weeks was 213 thousand, down quite sharply by 10.25 thousand compared to the average of the previous 4 consecutive weeks.

Finally, on the services sector, the Institute for Supply Management (ISM) said its services PMI index was at 54.1% in December, up from 52.1% in November and also surpassing the forecast of 53.5%.

The Eurozone recorded some important information. First, on inflation, the core Eurozone consumer price index (CPI) rose 2.7% year-on-year in December, unchanged from November and in line with forecasts. However, the headline CPI rose 2.4% last month, up from 2.2% in November and also in line with forecasts.

In Germany in particular, the headline CPI in this country increased by 0.4% compared to the previous month in December after decreasing by 0.2% in the previous month, surpassing the forecast of a 0.3% increase. Compared to the same period in 2023, the headline CPI in Germany increased by 2.6% compared to the same period in 2023.

Next, retail sales in the Eurozone rose slightly by 0.1% month-on-month in November after falling 0.3% in the previous month, against expectations of a 0.3% increase. Compared to the same period last year, retail sales rose by about 1.2% year-on-year.

In Germany, retail sales fell sharply by 0.6% in November compared to the previous month, following a 0.3% decline in October and contrary to expectations of a 0.5% increase. Compared to the same period last year, retail sales in this country increased by 1.3% compared to the same period last year.

Finally, on the labour market, the unemployment rate in the Eurozone stood at 6.3% in December, unchanged from November and in line with forecasts.

Source: https://thoibaonganhang.vn/diem-lai-thong-tin-kinh-te-tuan-tu-6-101-159797-159797.html