Vietnam Economic News: 24.8 – 31.8.2024
Summary of Vietnam Economic News: 24 - 31.8.2024
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Summary of Vietnam Economic News: 24 - 31.8.2024 ---
EVFTA ENABLES DIRECT EXPORT OF VIETNAMESE GOODS TO AUSTRIA
Vietnam Economics News – 29 August 2024
Vietnamese goods can be now exported to Austria under the EU-Vietnam Free Trade Agreement’s (EVFTA). According to Ms. Dinh Thi Hoang Yen, Head of the Vietnam Trade Office in Austria (concurrently Slovenia), under the agreement, tariffs and non-tariff barriers have been significantly reduced. The bilateral trade value increased from EUR1.19 billion in 2020 when the agreement took effect to EUR1.62 billion in 2023, with Vietnam earning an annual trade surplus of EUR1 billion plus. Vietnam has become the 23rd largest exporter to Austria, selling goods worth EUR1.4 billion to this market, up 2.5 percent from 2022, and reaching a market share of 0.7 percent (surpassing India). Meanwhile, the country ranks 57th among importers of goods from Austria, with an import value of EUR206 million, 9.1 percent less than 2022, accounting for 0.1 percent of Austria’s total import value. Vietnam’s exports to Austria continue to grow, contributing to strengthening Vietnam’s economic, trade relations with EU countries.
INTERNATIONAL PASSENGER VOLUME VIA AIRPORTS SEES STRONG GROWTH IN 8 MONTHS
Vietnam Economics News – 29 August 2024
The volume of international passengers passing through the country’s airports has seen significant growth in the first eight months this year, reported the Airports Corporation of Vietnam (ACV). According to the ACV, the transport output for the first eight months has maintained good growth. The domestic market suffered a slight decline, but the international market has been doing well. The total volume of take-offs and landings reached 460,135 flights, accounting for 65.2% of the annual plan, a decrease of 7.9% compared to the same period in 2023, of which international take-offs and landings reached 170,362 flights, up 22% and domestic take-offs and landings reached 289,772 flights, down 19.5% compared to the same period in 2023. The total passenger volume reached 75,852,267 passengers, making up 66.6% of the annual plan, a decrease of 4.3% compared to the same period in 2023. Notably, international passengers reached 27,472,661, up 32.4%, while domestic passengers reached 48,379,606, down 17.3% compared to the same period in 2023.
CENTRAL BANK TAKES LOOSER MONETARY MEASURES
Vietnam Economics News – 29 August 2024
The State Bank of Vietnam (SBV) has relaxed monetary measures in the context of sharp declines in the foreign exchange rate in recent days. Specifically, the SBV has stopped offering treasury bills since this week. This was the first time in many months that the SBV has not issued new bills. The SBV this week also continued to reduce the bill interest rate from 4.2 per cent per year to 4.15 per cent per year. This was the third time this month that the SBV reduced the interest rate on bills. Previously, on August 5, the SBV cut the rate from 4.5 per cent per year to 4.25 per cent per year. The rate was then further reduced to 4.2 per cent on August 20. The SBV still maintains a liquidity support through open market operation (OMO) channel with more than VND5.98 trillion at a term of 14 days and an interest rate of 4.25 per cent. Compared to previous trading sessions, the OMO term doubled, while the interest rate remained unchanged. Previously, the SBV also reduced the OMO interest rate from 4.5 per cent to 4.25 per cent in the session of August 5. After continuously maintaining a net withdrawal of liquidity since the beginning of June 2024, the SBV this week injected a net amount of more than VND9.1 trillion into the banking system. The SBV’s move to gradually reduce interest rates and stopping treasury bill issuance early this week shows the SBV's orientation to support the liquidity of the banking system, in order to contribute to establishing a lower interbank interest rate level shortly. At the same time, increasing the OMO loan term while keeping the interest rate unchanged also shows the SBV's initiative in reducing the interbank interest rate level. The SBV has continuously implemented monetary loosening measures inspite of sharp declines in the exchange rate in recent days.
VIETNAM HAS HUGE POTENTIAL FOR CROSS-BORDER E-COMMERCE DEVELOPMENT
Vietnam Economic News - 28 August 2024
According to the Vietnam E-Commerce Association’s Vietnam E-Commerce Business Index Report (EBI 2024), the Vietnamese e-commerce market was valued at US$25 billion in 2023, up 25 percent plus from 2022, with online retail sales reaching US$17.3 billion. Amazon Global Selling’s statistics show that the quantity of products sold by Vietnamese businesses on Amazon has increased by 300 percent plus over the past five years. Thousands of Vietnamese small- and medium-sized enterprises (SMEs) are exporting through Amazon, with the number of businesses achieving annual revenues of over US$1 million growing almost tenfold. Associate Professor, Dr. Tran Minh Tuan, Director of the Ministry of Information and Communications’ Department of Digital Economy and Digital Society, said at a recent e-commerce development seminar that cross-border e-commerce is witnessing substantial growth opportunities, especially given Vietnam’s proximity to the massive Chinese market. Additionally, Vietnamese digital technology companies have built business-to-business (B2B) e-commerce platforms, connecting with major global e-commerce platforms, such as Amazon, Alibaba, and Timo. As a result, when goods are listed on Vietnam’s e-commerce platforms, they also appear on major global e-commerce platforms, directly connecting buyers with sellers and manufacturers. Lai Viet Anh, Deputy Head of the Ministry of Industry and Trade’s Vietnam E-Commerce and Digital Economy Agency, said Vietnam has immense potential for cross-border e-commerce development, as it is an export-oriented economy strong in the fields of textile and garment, leather and footwear, rice and other agricultural products. It is estimated that cross-border e-commerce exports reached approximately US$3.3 billion in 2022 and are expected to exceed US$11 billion by 2027 with supportive mechanisms from both e-commerce platforms and the Government.