Lending rate forecast to be cut by 1-1.5pp in 2024

Hanoi: There will be little room for further reduction in deposit interest rates in 2024 as they have dropped deeply to pre-COVID-19 levels, while the lending interest rate can still be lowered by 1-1.5 percentage points next year, Vietcombank Securities (VCBS) forecast.

Under a newly released report, VCBS said compared to the end of 2022, the average deposit interest rate in the banking system has decreased by 2-2.9 percentage points, depending on terms. However, the decline has not been fully reflected as the cost of deposit mobilisation has only decreased by 0.1 percentage point from the peak.

According to VCBS, the deposit interest rate level currently drops deeply to the pre-COVID-19 level and there is little room for further reduction. However, during the period of economic recovery, maintaining low interest rates will be a priority. At the same time, keeping a low deposit interest rate for a long time is also a necessary condition to pull the lending interest rate down.

Besides, the handling of corp
orate bonds requires a lot of capital resources and a low interest rate will be a prerequisite to faster handling of the bonds.

According to VCBS, by the end of the third quarter of 2023, the average lending interest rate recorded on the financial statements of listed banks decreased by about 0.6 percentage points compared to the peak in the first quarter of 2023. However, lending interest rate is still about 1.6 percentage points higher than the bottom recorded in the fourth quarter of 2021.

Specifically, after the State Bank of Vietnam (SBV) lowered its policy interest rates four times, deposit interest rates decreased rapidly. Actual lending interest rate has also gone down by about 2-2.5 percentage points for new loans. However, the interest rate applied to outstanding loans is still high at more than 10% per year.

VCBS expects the lending interest rate will decrease by another 1-1.5 percentage points in 2024. In particular, banks will consider lowering interest rate for some groups of firms which have
good business prospects, with an aim to restructure debts and support customers through difficult times.

However, experts forecast that banks will be more cautious in lending as their net interest margin (NIM) is on the decline and bad debt is on the rise. Therefore, VCBS believes that there will be a difference in lending interest rate reduction.

Besides, the group of private banks will drop the rate more sharply than the group of State-owned banks due to a rise in late debt repayment. VCBS expects lending interest rates of private banks will improve in the near future when customers return to repay debts.

Tran Hoai Nam, deputy general director of HDBank, also said there is currently no room to reduce deposit interest rates, while lending interest rates will gradually decrease until the first quarter of next year.

However, it is difficult to make a long-term forecast for the rate after that time, as it depends on domestic and world macro-economic fluctuations, Nam said./.
Source: Vietnam News Agency

Domestic gold prices hit new record high

Hanoi: Domestic gold prices kept skyrocketing on December 20 morning to pass the historic high, reaching 75.4 million VND (nearly 3,100 USD) per tael (1.2 ounces).

At 9:13 am in Hanoi, Doji Group listed each tael of SJC gold at 74.4 – 75.4 million VND (buying – selling), adding 550,000 VND for buying and 500,000 VND for the selling side from a day before.

Meanwhile, Phu Quy Group rated the precious metal at the same prices to Doji Group’s, up 550,000 VND for both buying and selling compared to the previous day.

The prices of gold also went up in the global market when the USD weakens and investors are waiting for the announcement of a series of new economic data later this week.

The upward trend in gold prices occurs as the US dollar index decreases by 0.4%, and the yield on 10-year US government bonds is near its lowest level since July 2022.

Bart Melek, Global Head of Commodity Strategy at TD Securities, has said that investors have been strongly buying gold in anticipation of the Federal Reserve (FED)
‘s cutting interest rates before inflation reaches its target./.
Source: Vietnam News Agency

Vietnam’s trade surplus surges to record high

Hanoi: Vietnam recorded a trade surplus of 26 billion USD in 2023, nearly tripling the figure last year and the highest on record, Deputy Minister of Industry and Trade Phan Thi Thang said at a teleconference held in Hanoi on December 20.

According to a report from the Ministry of Industry and Trade, despite formidable challenges in trade activities posed by poor economic growth and weak demand in large export markets such as the US, the EU, Japan and ASEAN, Vietnam capitalised on the recovery of its major and traditional markets to promote export.

The country shipped 354.5 billion USD worth of products in the year, down 4.6% year-on-year, which, Thang said, marked an easing from the 12% in the first half.

She added that 33 items recorded export turnover of 1 billion USD in 11 months, of which seven posted a value of more than 10 billion USD, accounting for 66% of the total revenue.

Farm produce was among key exports, she said, adding processed industrial products accounted for 85% of the export turnover.

General Director of the ministry’s Agency for Foreign Trade Tran Duy Dong said export showed signs of recovery in the end of 2023, and relished the prospect of better export situation in 2024 on the back of current free trade agreements (FTAs), and conclusion of negotiations and implementation of the trade deals with new markets such as Israel and the United Arab Emirates.

He stressed that the sound political relations with such trade partners as China, the EU and the US will create a premise for Vietnam to expand its economic, trade and investment cooperation.

Given those advantages, the ministry will strive to increase the export revenue growth by 6%, and trade surplus to some 15 billion USD in 2024, he said, underscoring the ministry will work to diversify export markets and supply chains, support enterprises to capitalise on the existing FTAs, especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP), the EU-Vietnam FTA and the UK-Vietnam FTA, to bolster shipments.

ditionally, it will coordinate with the Ministry of Agriculture and Rural Development to negotiate with China for official export of more agricultural products from Vietnam, and speed up customs clearance at Vietnam-China border gates, Dong added./.
Source: Vietnam News Agency

Purchasing power on Christmas market still weak

Hanoi: A wide range of decorations with stable prices are now available in the Hanoi market as Christmas is nearing, but purchasing power remains weak.

Sellers on such streets as Hang Ma, Hang Luoc, and Luong Van Can, home to many toy and decorations stores, said that this year, consumers are tightening their belts due to economic difficulties, leading to slow consumption though Christmas is just around the corner.

Most visitors here are young people coming for sightseeing and taking check-in photos, they noted.

Nguyen Van Bay, owner of a souvenir shop on Hang Luoc in Hoan Kiem district, said the street has become more vibrant on these days, but the majority of visitors are youngsters going out for pleasure.

There are few buyers, which have nosedived by 30 – 50% compared to previous years.

Economic difficulties have discouraged people from spending, especially on Christmas decorations, he added.

Sharing the same view, Hoang Thi Van Anh, a shop owner on Hang Ma in Hoan Kiem district, noted prices of deco
rations this year are equivalent to last year’s, but purchasing power has yet to meet expectations because of economic slowdown.

Therefore, she continued, her store has offered some new and unique products to attract buyers.

Aside from decorations, the market of fresh pine trees also has diverse products to offer. Most of the trees are imported from Denmark, the Netherlands, and China.

In addition to the traditional market, Christmas decorations and gifts with prices about 20% lower are also being sold on e-marketplaces such as Lazada, Sendo, and Shopee or social media platforms like Facebook or Zalo./.
Source: Vietnam News Agency

Specific policies needed for LNG power development: Insiders

Hanoi: The development of thermal power, including natural gas and liquefied natural gas (LNG), requires specific policies and mechanisms to attract investment as this industry plays a crucial role in ensuring the supply of electricity for the economy and promoting the energy transition, according to insiders.

Assoc. Prof. Dr. Dinh Trong Thinh from the Vietnam Academy of Finance underlined the importance of having a specific roadmap for developing clean energy models in the future in the context that Vietnam’s energy demand continues to increase each year, and the energy supply is becoming increasingly scarce.

According to Thinh, gas power sources can quickly connect to the national power grid. Additionally, they produce less CO2 emission.

The development of the LNG industry will help ensure energy security, protect the environment, and maintain sustainable development, he added.

National Power Development Plan VIII for the 2021 – 2030 period with a vision towards 2045 (PDP VIII) has outlined the construc
tion of 13 new LNG power plants with a total capacity of 22,400 MW by 2030, and two more with a capacity of 3,000 MW by 2035.

So far, as many as 13 LNG power projects have been given in-principal approval for investment. Among them, five projects are in the process of implementation.

Notable, Nhon Trach 3 and 4 gas power plants in the southern province of Dong Nai are national key projects under PDP VIII. They have been invested by the PetroVietnam Power Corporation (PV Power), a subsidiary of the Vietnam Oil and Gas Group (PetroVietnam) with a total investment of 1.4 billion USD. With a combined capacity of 1,500 MW, they are the first LNG power projects in Vietnam.

Thinh stressed the necessity to address several issues related to infrastructure and policy mechanisms to attract investment sources for developing LNG power projects, saying that attention should be paid to conducting comprehensive planning of LNG import terminal projects to save resources and to promote economic development and the domestic
LNG market’s development.

Vietnam needs to promptly perfect the legal framework as a basis for deploying the construction and using infrastructure related to LNG, and ensure transparent and effective management, towards improving confidence of investors in this industry, he noted.

Regulations related to procedures and investment processes in the laws on investment, bidding, construction, environmental protection and planning must be reviewed and amended, he went on./.
Source: Vietnam News Agency

China gives green light to import of Vietnamese watermelon via official channel

Hanoi: With the recent permission from Chinese authorities, watermelon has become the next farm produce of Vietnam to be exported to China via the official channel.

The General Administration of Customs China (GACC) on December 15 announced the requirements for phytosanitary measures for watermelon imported from Vietnam.

Accordingly, the fresh fruit meeting those standards will be exported to this market through designated border gates as agreed upon by the GACC and the Vietnamese Ministry of Agriculture and Rural Development (MARD).

The fresh watermelon permitted to enter the Chinese market must come from the cultivation and processing establishments registering with the MARD. Meanwhile, the GACC will verify the list of businesses provided by Vietnamese authorities and regularly update the list on its website.

Chinese statistics show that considerable room remains for agricultural cooperation between the two countries, whose trade in farm produce has been growing continuously. During the first 11 months
of 2023, China imported 44.62 billion CNY (nearly 6.3 billion USD) worth of Vietnam’s agricultural products, up 20.3% year on year./.
Source: Vietnam News Agency

PepsiCo gains permission to build food factory in Ha Nam

Ha Nam: The People’s Committee of Ha Nam province on December 19 handed over an investment registration certificate to a PepsiCo food production project of the PepsiCo Vietnam Foods Company Limited to invest in Dong Van I industrial park in Duy Tien commune.

Covering an area of 80,000 sq.m, the project has a total investment capital of more than 2 trillion VND (82.2 million USD) with a capacity of over 23,000 tonnes of all kinds of snacks a year. The project is expected to complete construction in the third quarter of 2025.

Speaking at the conference, chairman of the provincial People’s Committee Truong Quoc Huy said the project will actively contribute to improving the province’s industrial production value in particular and socio-economic development in general. He requested relevant departments and branches to create favourable conditions to help the company carry out administrative procedures as well as remove obstacles in the construction process.

The chairman also asked the company to focus on financ
ial and human resources in order to implement the project on schedule and pay attention to vocational training and job creation for local labourers.

Nguyen Viet Ha, General Director of PepsiCo Vietnam Foods Company Limited, said the company will make efforts to implement the project on schedule.

The company will invest in expanding raw material areas in the locality and other northern provinces. The firm will also apply regenerative agriculture methods and digital technology, he added./.
Source: Vietnam News Agency

Vietnam among countries with high economic growth in 10 years

Hanoi: Vietnam, together with China and some other Asian countries, is among the 20 countries with the fastest economic growth over the last 10 years, according to Yahoo Finance.

In its recent article, the market news website sourced data from the International Monetary Fund (IMF), considering the growth in real GDP for all countries over the last 10 years to average the real GDP growth rates.

It said that with an average real GDP growth rate of 6.1% during 2012 – 2022, Vietnam ranks among those with high economic growth. The agricultural sector highly supports the economy by contributing to the GDP as well as employment.

Vietnam’s agro-forestry-fishery exports reached 53.22 billion USD for the first time in 2022, up 9.3% from the previous year. As a result, its agricultural sector posted a trade surplus of 8.5 billion USD, accounting for over 75% of the economy’s total trade surplus.

The article also cited Vietnam’s statistics as showing that the US remains the biggest market of Vietnamese agro-forestry-
fishery products, with an import turnover of 13.3 billion USD, equivalent to 25% of the total exports of those products. It is followed by China with more than 10 billion USD (18.9%), Japan 4.2 billion USD (7.9%), and the Republic of Korea 2.5 billion USD (4.7%).

In terms of continents, Asia made up 44.7% of the exports, the Americas 27.4%, Europe 11.3%, Oceania 1.7%, and Africa 1.7%.

The five countries with the highest economic growth rates in 10 years is Guyana (South America) nearly 15%, Ireland (Europe) over 9%, Ethiopia (Africa) 8.43%, Tajikistan (Central Asia) over 7%, and Côte d’Ivoire (West Africa) over 6.8%, according to the writing./.
Source: Vietnam News Agency