Vietnam Economic News: 14 - 21.6.2024
Summary of Vietnam Economic News: 14 - 21.6.2024
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Summary of Vietnam Economic News: 14 - 21.6.2024 ---
VIETNAM CENTRAL BANK SAYS 2024 GDP GROWTH SEEN MEETING 6.0%-6.5% TARGET
Reuters News – 21 June 2024
Vietnam's gross domestic product growth is expected to meet the government's target of 6.0%-6.5%, the country's central bank governor said on Friday. "The domestic economy has seen positive signs of recovery," the State Bank of Vietnam governor Nguyen Thi Hong said in a statement. Hong said industrial production and investment had seen significant growth, while the operations of the banking system were "stable". Vietnam's GDP in the first quarter grew 5.66% from a year earlier, backed by robust exports, faster than an expansion of 3.41% in the same period last year, but slower than the 6.72% growth in the fourth quarter. The country, however, is facing upward pressure on inflation, leaving the central bank little room to boost credit growth to underpin growth. The annual inflation rate edged up to 4.44% in May, nearing the government's target ceiling of 4.5% for the year.
VIETNAM POWER GENERATION, DAILY CONSUMPTION HIT NEW RECORD HIGH
Reuters News – 20 June 2024
Vietnam's power generation capacity and daily consumption have hit new record high amid a heatwave, state-run utility EVNsaid on Friday. The Southeast Asian industrial hub has this year been ramping up coal burning and expanding its generation capacity and grid to avoid a repeat of last year's crippling blackouts. Actual power generation capacity nationwide hit 49.53 gigawatts (GW) on Wednesday, EVN said in a statement. This is higher than the previous record of 47.67 GW on April 27. Daily power consumption hit 1.03 billion kWh on Friday last week, higher than the previous record of 1.009 billion kWh on May 29, according to EVN. "Intense heat, particularly in northern and central areas, has driven up power consumption in mid-June with temperatures staying above 35 degree Celsius (95°F) for several days in the month," EVN said. The company on Friday repeated its call on consumers to save power, by refraining from using several large devices simultaneously and setting air conditioners below 26 degree Celsius.
S&P AFFIRMS VIETNAM’S LONG-TERM RATING OUTLOOK STABLE
Vietnam News – 21 June 2024
S&P Global, the US-based credit rating agency, has affirmed a 'BB+' long-term sovereign credit rating and a 'B' short-term rating for Vietnam, adding that its long-term rating outlook is stable. In a Thursday release, S&P Global says Vietnam's economy will accelerate over the next 12 months as global demand picks up and the country gradually resolves its domestic challenges. “This should keep the government's debt repayment burden stable,” it says. The sovereign ratings on Vietnam reflect the country's strong economic growth outlook, moderate government debt levels, and generally sound external position. “As multi-national conglomerates diversify their operations in the region, Vietnam will likely continue to attract substantial foreign direct investment (FDI) inflows to its export manufacturing sector over the next several years,” the report says. It also mentions disadvantages including modest GDP per capita, banking sector vulnerabilities and evolving institutional settings.
NORFUND GRANTS US$30 MILLION CONVERTIBLE LOAN TO SEABANK
Reuters News – 20 June 2024
Norfund, the Norwegian Investment Fund for Developing Countries, has decided to invest US$30 million to Southeast Asia Commercial Joint Stock Bank (SeABank, stock code: SSB) in form of a convertible loan. The loan can be converted into common shares of SeABank within 4-year term, aiming at providing additional capital to support retail banking customers, small and medium enterprises (SMEs) and micro-enterprises in Vietnam. Norfund is an investment fund owned and funded by Norwegian Government that works to create jobs and improve lives by investing in businesses in developing countries that drive sustainable development. Norfund is fully funded by the Norwegian International Development Assistance budget - Government's most important tool for strengthening the private sector in developing countries and for reducing poverty. Ms. Le Thu Thuy -- Vice Chairwoman of the BOD, SeABank shares: "The partnership shares our joint purpose of impacting Vietnamese economy growth in general, while enhancing financial access for SeABank's SMEs and retail banking customers in particular. The loan also supports the Bank's sustainable development strategy to the utmost in the upcoming period." Ms. Fay Chetnakarnkul -- Regional Director (Asia), Norfund said: "Financial inclusion is Norfund's core mandate and is aligned with SeABank's strong commitment to finance and support retail banking customers and SMEs in Vietnam. The partnership will look to be a catalyst to help uplift the unbanked and underbanked in the country." The cooperation aims to provide SMEs with additional financial sources to fulfill their long-term capital demands. The Bank also has additional capital for retail lending, considering the increasing financial needs of this group.
PUTIN SAYS RUSSIA IS KEEN TO PARTNER WITH VIETNAM IN ENERGY AND SECURITY
Reuters News – 20 June 2024
Russian President Vladimir Putinsaid during a visit to Vietnam on Thursday said that Russia was keen to partner with Vietnam in energy and security. Russia, a major energy, natural resources and nuclear power, pivoted to Asia after the West imposed sanctions on Moscow for the conflict in Ukraine. "We will also increase the efficiency of cooperation on these projects in the energy and gas sectors in order to create favourable conditions for the work of our companies," Putin said. The Russian leader made the comments in a televised news briefing with Vietnamese President To Lam. Putin said separately at the meeting with Vietnamese Prime Minister Pham Minh Chinh that Russia was ready to set up long-term supplies of LNG to the country, according to RIA Novosti news wire. Russia has long cooperated with Vietnam in the oil and gas sector with the state-run company Zarubezhneft being at the forefront of that business. Vietsovpetro, a joint venture (JV) 49%-owned by Zarubezhneft and the rest by Vietnamese state oil firm PetroVietnam, will produce 250 million barrels of crude oil from Vietnam's offshore fields by Friday, Vietnam's government said late on Tuesday. The JV, which has reported revenue of $88 billion since its formation in 1981, has, however, been facing shrinking oil reserves at its fields, the statement said. According to the Kremlin, Zarubezhneft has also acquired an investment license for development of offshore hydrocarbon block 11-2, while Russia's largest LNG producer Novatek and PetroVietnam signed a memorandum of understanding and cooperation.