Vietnam Economic News: 12.10 – 19.10.2024
Summary of Vietnam Economic News: 12.10 - 19.10.2024
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Summary of Vietnam Economic News: 12.10 - 19.10.2024 ---
VIETNAM CENTRAL BANK SAYS TO KEEP POLICY SUPPORTIVE, OPEN TO RATE CUTS
Reuters News – 17 October 2024
Vietnam can still meet its economic growth target this year despite the extensive damage caused by Typhoon Yagi and is open to the possibility of interest rate cuts, central bank deputy governor Dao Minh Tu said on Thursday. Tu also told a media briefing that business and manufacturing activities were recovering from the typhoon. "The central bank will continue to pursue supportive monetary policies during the rest of the year," Tu said. "We will keep policy rates at least at the current levels, and are open to the possibility of further rate cuts." The central bank, formally known as the State Bank of Vietnam (SBV), reported that bank lending had risen 9% as of Sept. 30 from end-2023. Vietnam's economic growth largely relies on bank lending, and the central bank is targeting credit growth of 15% this year. Vietnam's gross domestic product (GDP) rose 7.4% in the third quarter from a year earlier, the strongest pace in two years, as growth in exports, industrial production and foreign investment offset the initial effects of typhoon-related flooding and damage in September. Average consumer prices in the first nine months of this year rose 3.88% from a year earlier, below the government's targeted inflation cap of 4.5% for the year.
At Thursday's meeting, the central bank also announced that the country's biggest bank, Vietcombank, will take over smaller lender Construction Bank and one of the leading commercial banks, Military Commercial Joint Stock Bank (MBBank), will take over Oceanbank. The moves are part of the central bank's restructuring programme to stabilise the financial sector and tackle non-performing loans, one of the largest banking consolidation operations in the country recently. A central bank official at the briefing also highlighted a rising trend of non-performing loans. "The goal of the compulsory takeovers is for the banks to return to normal operations, handle their accumulated losses and ensure depositors' rights," said Nguyen Duc Long, deputy head of the central bank's inspection department. Under the restructuring plan, two other poorly performing commercial banks, DongA Bank and Global Petro Bank are still pending a restructuring plan.
VIETNAM ESTIMATES COST OF NEW RAILWAY LINK WITH CHINA AT $7.2 BILLION
Reuters News – 16 October 2024
Vietnam has estimated the cost of building a new railway linking it with China's Yunnan province at 179 trillion dong ($7.2 billion), state media reported on Wednesday. The 427-km (265-mile) railway would run from the border province of Lao Cai through the capital Hanoi and port city of Haiphong to Ha Long City. Vietnam has been seeking to upgrade its aging railway systems, including plans to build a high-speed railway running along the length of the country and lines linking with China, its largest trading partner. Vietnam Railway Authority has submitted the plan to build the Lao Cai-Ha Long railway to the transport ministry for review and approval, the report said. Construction of the railway is expected to begin in 2030, it said, adding that transportation demand along this railway link is estimated at 8.3 million passengers and 17.5 million metric tons of cargo a year by 2050. Vietnam has approached China for technology and funding for its plans to develop railways linking the two countries, which are already connected by a system of highways and two railway lines that are old and need upgrading on the Vietnam side. The two Asian neighbours have repeatedly showed interest in boosting rail links, and recent visits to each other's countries by their leaders often included signing of agreements on railway cooperation. Separately, Vietnam's National Assembly at its next meeting beginning on Monday is expected to approve a $67-billion plan to build a 1,541-km high-speed railway from Hanoi to business hub Ho Chi Minh City, the country's largest ever infrastructure project.
FITCH AFFIRMS VIETNAM OIL AND GAS GROUP AT 'BB+'; OUTLOOK STABLE
Dow Jones Institutional News – 16 October 2024
Fitch Ratings has affirmed Vietnam Oil and Gas Group's (PVN) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook. Fitch has also affirmed PVN's senior unsecured rating at 'BB+'. PVN's IDR reflects its Standalone Credit Profile (SCP) of 'bb+', which is the same as the Vietnam sovereign rating (BB+/Stable). PVN's ratings will remain equalised with those of the sovereign under Fitch's Government-Related Entities Rating Criteria even if the SCP weakens, provided our assessment of PVN's strong likelihood of receiving state support under the criteria remains unchanged. PVN is wholly owned by the state, which exerts significant influence over its operating and financial policies. PVN's 'bb+' SCP reflects its conservative financial profile and market position as Vietnam's largest upstream oil and gas producer with strong vertical integration across midstream and downstream segments in the energy value chain. PVN's stable gas distribution operations and power generation earnings help offset its high-cost upstream operations and the lower complexity of its refinery.
VIETNAM SAYS SOUTH KOREA'S HYOSUNG TO INVEST $4 BLN MORE IN THE COUNTRY
Reuters News – 14 October 2024
South Korean industrial conglomerate Hyosung Group plans to invest an additional $4 billion in Vietnam, the Vietnamese government said late on Monday. Hyosung plans to invest in production of hi-tech materials, bio jet fuels, and carbon fibres, the government said in a statement, adding that it also plans to invest in data centres. The statement came after a meeting earlier on Monday in Hanoi between Vietnamese Prime Minister Pham Minh Chinh and Hyosung chairman Cho Hyun-joon. The government did not give a timeframe for the investment. It said the group had already invested $4 billion in Vietnam, creating 10,000 jobs.