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Consumption and exports continue to drive Vietnamese growth
HANOI: Consumption, one of the key drivers of Vietnam’s growth in 2022, is showing signs of deceleration in some sectors.
But overall, the General Statistics Office’s (GSO) data showed Vietnam’s total retail sales of goods and services in November increased 17.5% year-on-year (y-o-y) to an estimated 514.2 trillion Vietnamese dong (RM92bil) after a 17.1% growth a month earlier, which was the slowest pace since April.
The latest figures marked the 12th straight month of expansion in the retail sector as consumption continued to rise despite ongoing cost pressures.
As at the end of November, total retail sales of goods and services climbed 20.5% y-o-y to 5.18 quadrillion Vietnamese dong (RM959bil) while it decreased 5% in the same period of 2021.
However, the 11-month figure this year represented a 14.9% increase, compared to the 11 months of 2019, the year before the Covid-19 pandemic broke out.
According to the GSO, the 11-month revenues only reached 82.5% of the estimate under normal conditions from 2020 to date.
At the end of last year and the beginning of this year, several government agencies and experts predicted Vietnam’s growth in 2022 would depend on exports and the disbursement of public investment.
Consumption at that time was not believed to be strong enough to contribute significantly to the country’s recovery with the rationale being that after two years of the pandemic, and with several lockdowns and decreasing incomes, people would be cautious about spending and rather save more to be better prepared for an uncertain future.
But in reality, Vietnam’s growth this year has relied heavily on consumption and exports, partly the disburse of foreign direct investment (FDI).
Exports, as expected, played an important role in Vietnam’s strong recovery in 2022, with the total import and export turnover of goods in the 11 months rising 11.8% y-o-y to an estimated US$673.8bil (RM2.95 trillion), in which exports increased by 13.4% and imports increased by 10.1%.
Trade surplus remained high at US$10.6bil (RM46bil) in the last 11 months.
The disbursement of FDI in the 11 months reached nearly US$19.7bil (RM86bil), up 15.1% over the same period last year.
Meanwhile, the disbursement of state budget investment was slower than expected.
As at the end of November, public investment disbursement reached only 58.3% of the programme of Prime Minister Pham Minh Chinh, and lower than the 63.86% recorded in the same period last year, according to the Ministry of Planning and Investment’s 11-month report.
Retail was a bright spot in this context, with an average growth of 21.8% over the past 11 months.
“Revenge” consumption drove a boom to offset the hostile experience of being forced to “stay at home” during the pandemic.
When the government relaxed the pandemic controls, retail sales and travel picked up.
Passenger transport increased 48.7% in the 11 months, while the number of international visitors to Vietnam reached nearly three million, which was 21.1 times higher than last year, but still down 82% compared to pre-pandemic levels.
Statistics from the Vietnam National Administration of Tourism showed that the number of domestic tourists in the first 10 months reached nearly 92 million, up three times over the same period last year, and surpassing 2019’s total.
Behind consumption is also a story of savings, which is an essential source of social investment and growth in the long run. — Viet Nam News/ANN