Vietnam Economic News: 20.7 - 27.7.2024
Summary of Vietnam Economic News: 20.7 - 27.7.2024
---
Summary of Vietnam Economic News: 20.7 - 27.7.2024 ---
VIETNAM BIDS FAREWELL TO LATE PARTY LEADER NGUYEN PHU TRONG
Reuters News – 25 July 2024
Vietnam on Thursday began a two-day state funeral service to bid farewell to Nguyen Phu Trong, 80, the leader of its ruling Communist Party who died a week earlier. Amid tight security, hundreds of people took to the streets of Hanoi around a downtown funeral house and went to his family home outside the capital to pay their last respects to the country's most powerful man. State officials and foreign dignitaries, including European Union foreign policy chief Josep Borrell, President of the Cuban National Assembly Esteban Lazo Hernandez, South Korean Prime Minister Han Duck Soo, Cambodia's former prime minister Hun Sen, President of the Australian Senate Sue Lines, were seen attending the funeral. Other foreign dignitaries, including the U.S. Secretary of State Antony Blinken, China's top political advisor Wang Huning and Indian security advisor Ajit Doval are also expected to be in Hanoi during or after the funeral to bid farewell to Trong. Cuba and Laos, Vietnam's communist friends, have also held state funeral for the Vietnamese leader. "My infinite condolences to Comrade General Secretary Nguyen Phu Trong, an exceptional leader, a steadfast communist party member, a shining example of constantly studying and following Ho Chi Minh's ideology," Vietnam's President To Lam, who has temporarily taken over Trong's duties, wrote in the funeral book, referring to the modern Vietnam founding father Ho Chi Minh. Trong unleashed what many saw as a China-style crackdown on corruption, known as "blazing furnace", under which hundreds of senior officials were investigated for graft and many forced to quit, including cabinet ministers, a parliament chairman and two state presidents. Trong also led Vietnam to boost its relations with global powers, including the United States and China, as part of its "bamboo diplomacy", as the country tried to navigate rising global disputes and maintain economic growth.
VIETNAM'S JAN-JULY FOREIGN INVESTMENT INFLOWS UP 8.4% Y/Y AT $12.55 BLN
Reuters News – 27 July 2024
Vietnam received foreign investment inflows of $12.55 billion from the start of the year to July 20, up 8.4% from the corresponding period a year earlier, the planning and investment ministry said on Saturday. Foreign investment pledges, which indicate the size of future inflows, rose 10.9% in the period to $18 billion, it said in a report. Of those, 70% were due to be invested in manufacturing and processing, while 16% targeted real estate, it said. Singapore was the top source of foreign investment pledges, followed by Hong Kong and Japan.
VIETNAM AND THE US DISCUSS SUPPLYING HANOI WITH C-130 MILITARY TRANSPORT PLANES
Vietnam News – 25 July 2024
The United States and Vietnam are discussing the sale of Lockheed Martin C-130 Hercules military transport planes to Hanoi in a sign of closer security cooperation between the two former foes. The talks could lead to a supply agreement this year, in what would represent Vietnam's largest military deal since it said publicly at the end of 2022 that it intended to diversify its defence supplies, which have for decades relied heavily on Russian gear. The C-130 can carry soldiers, military equipment and other supplies, and would boost Vietnamese defence capabilities at a time of rising South China Sea boundary tensions with China and other countries in the region. The United States could offer Hanoi financial support as part of a sale. According to a U.S. official, the support could amount to tens of millions of dollars covering maintenance and other costs.
US DELAYS SENSITIVE VIETNAM 'MARKET ECONOMY' DECISION UNTIL AUGUST
Reuters News – 25 July 2024
The U.S. Commerce Department said on Wednesday it has delayed a difficult decision on whether to upgrade Vietnam to market economy status by about a week until early August, citing IT disruptions from the CrowdStrike software bug. A decision on the upgrade that Hanoi has long sought had been due by Friday. The upgrade is opposed by U.S. steelmakers, Gulf Coast shrimpers and honey farmers, but backed by retailers and some other business groups. It would reduce punitive anti-dumping duties on Vietnamese imports given the country's current status as a non-market economy marked by heavy state influence. A Commerce Department spokesperson said a "small number" of anti-dumping and countervailing duty case filings were disrupted by the recent botched software update by cybersecurity firm CrowdStrike, which crashed computer systems worldwide. "Consistent with Department of Commerce actions taken in response to the disruptions resulting from such incidents, deadline extensions in certain AD/CVD cases have been made. The Vietnam non-market economy status case is included among these, and will be made public by Friday, August 2nd."
VIETNAM'S CENTRAL BANK VOWS TO DEFEND CURRENCY, WARNS BAD LOANS RISING
Reuters News – 23 July 2024
Vietnam's central bank said on Tuesday that bank lending and bad loans were both rising and vowed to continue defending the currency and keep inflation under control. The economy has seen growth picking up in the last quarter but is facing turbulence in the banking sector and a rise in inflation. It is also using its reserves to fight the depreciation of the dong, caused by high interest rates in the United States. "Banks' lending has accelerated over the past two-to-three months, after shrinking in the first two months of the year," central bank deputy governor Dao Minh Tu told a regular press briefing in Hanoi. He noted loans had increased by 6% in the first half of the year from the level recorded at the end of 2023. That means the target of 15% annual credit growth this year was within reach, as lending tends to pick up in the second half of the year - a critical goal as economic growth in Vietnam depends heavily on bank loans. However, bad loans are also growing, largely as a result of troubles faced by the banking system last year. The deputy governor said non-performing loans were "high", amounting to 5% of outstanding credit and could rise to 6.9%. "We will have more proactive measures to ensure quality of loans and control bad debts to guarantee the safety of the system," he said. The bank also reiterated its vow to defend the currency. It commenced dollar sales in mid-April and will continue to keep foreign exchange rates stable, Tu said, declining to answer a question about the current level of foreign reserves. That is also aimed at containing inflation, which was at 4.3% in June, just slightly below the 4.5% ceiling set by the government for this year. Tu also repeated that weaker banks needed consolidation and confirmed that Saigon Joint Stock Commercial Bank, once one of Vietnam's largest private lenders by deposits before a bank run in 2022, was still under the central bank's management. That cost the central bank about $24.5 billion as of late May in loans to shield depositors.