Vietnam's economy has clearly recovered.

Dragon Capital’s recently published analysis report assessed that Vietnam’s economy has shown many clear signs of recovery. Growth momentum from both supply and demand sides continues to improve positively.

Inside an electric vehicle factory in Hai Phong. (Source: Getty Image)

Agricultural production and services maintained good growth momentum. The industrial sector grew by 11.2% in July compared to the same period last year and 8.5% in the first seven months of the year, with manufacturing and processing increasing by 9.5%. The PMI in July reached 54.7 points, marking the fourth consecutive month above the 50-point mark, indicating continued improvement in manufacturing activity.

In addition, the growth momentum on the demand side also recovered positively. Total registered FDI capital in the first seven months of the year exceeded 18 billion USD, while disbursed FDI reached approximately 12.6 billion USD, up 10.9% and 8.4% respectively over the same period. Total retail sales of goods and consumer service revenue increased by 9.4% in July and 8.7% in the first seven months of the year.

The CPI in July increased by 0.5% compared to the previous month, equivalent to an increase of 4.4% compared to the same period last year, due to the low base factor of the previous year, the increase in the basic salary and the adjustment of prices of some goods and services; especially the cost of health insurance. The CPI in the first seven months of the year increased by 4.12% compared to the same period last year, within the target range set by the National Assembly.

In the remaining months of 2024, inflation is expected to adjust down slightly due to the absence of the low base effect of the previous year. The average annual inflation is expected to reach about 4% and remain within control.

In the context of the cooling of the USD, reflecting the prediction that the US Federal Reserve (Fed) will cut interest rates in the upcoming meetings, along with domestic inflation being controlled, the State Bank is expected to continue to maintain a loose monetary policy in the coming time.

Notably, the State Bank reduced the open market operation (OMO) interest rate and treasury bill interest rate by 25 basis points in the first week of August, after increasing them twice by a total of 50 basis points since April. According to experts, this is a clear demonstration of the State Bank’s commitment to stabilizing interest rates to support the economy.

Although the global financial market has fluctuated recently, Dragon Capital believes that the impacts on Vietnam's economy will not be large and will only be temporary.

Source: https://baoquocte.vn/dragon-capital-kinh-te-viet-nam-phuc-hoi-ro-ret-283469.html