THE OUTSTANDING ECONOMIC NEWS IN MAY 2024.
PRIME MINISTER: GREEN ECONOMY, DIGITAL ECONOMY WILL BE A BREAKTHROUGH IN VIETNAM-CHINA RELATIONS.
Prime Minister Pham Minh Chinh believes that Vietnam-China economic - investment - trade cooperation, especially in the field of green economy development, and digital economy will be an important and breakthrough driving force, helping to bring the relationship between the two countries to continue to develop to a new height.
On the morning of May 14th 2024, Prime Minister Pham Minh Chinh chaired a seminar with typical Chinese enterprises in the fields of green economy and digital economy development.
Welcoming the Chinese business delegation to attend the seminar, the Prime Minister affirmed that the Party and State of Vietnam always consider developing friendly relations with China as an objective requirement, strategic choice and top priority in the overall foreign policy.
Prime Minister Pham Minh Chinh. Photo: Nhat Bac
Regarding the orientation to attract foreign investment, the Prime Minister said Vietnam identified the foreign-invested economic sector playing an important role. Vietnam clearly defines the orientation to attract selective foreign investment, create spillover connections between the FDI sector and the domestic economic sector, and promote public-private cooperation.
The Prime Minister hopes that large, capable and prestigious Chinese enterprises would cooperate to soonhave large, high-tech projects, representing China's development level and in line with Vietnam's needs, applying sustainable business models in the field of green economy, digital economy, knowledge economy, circular economy, sharing economy, creating conditions for Vietnamese enterprises to participate in value chains and supply chains of corporations, the region and the globe.
The Head of Government also proposed to continue promoting the connection between the two economies to soon concretize and realize agreements of senior leaders of the two countries, especially the construction of cross-border railways and roads, promoting the construction of cross-border cooperation zones, etc accelerating new openings, upgrading a number of agreed border gate pairs, and piloting the deployment of smart border gates.
The Prime Minister said that with high determination, great efforts and strong actions of the two sides, on the basis of good bilateral relations, Vietnam-China Economic-investment-trade cooperation, especially in the fields of green economic development, and digital economy, will be an important driving force, the breakthrough helps bring the relationship between the two countries to continue to grow to new heights.
The Government of Vietnam commits to always listening, continuing to accompany, support and create favorable conditions for foreign enterprises in general and Chinese enterprises in particular to invest effectively, long-term and sustainably in Vietnam, the success of investors is also the success of Vietnam.
Chinese Ambassador Hung Ba and business representatives thanked the Prime Minister for taking the time to attend the talks. This event shows the high importance of the Vietnamese side to strengthening economic, trade and investment cooperation with China. The delegates fully agreed with the contents mentioned by the PrimeMinister, highly appreciated the Prime Minister's message on "harmonious benefits, shared risks".
Leading Chinese enterprises affirmed that they attach great importance to the Vietnamese market; Vietnam's Investment business environment is increasingly improved with the right and appropriate development orientations and strategies, especially in the digital economy, green economy and emerging fields; impressed with Vietnam's Dynamic and rapid development and socio-economic achievements.
Quoted from CafeF: https://cafef.vn/thu-tuong-kinh-te-xanh-kinh-te-so-se-la-dot-pha-trong-quan-he-viet-nam-trung-quoc-188240514151843387.chn
LENDING RATES WILL REMAIN LOW BETWEEN NOW AND THE END OF THE YEAR
Deposit interest rates increased again, but lending rates are forecast to remain low from now until the end of the year.
From the beginning of 2024 until now, commercial banks have continuously implemented many preferential credit packages to meet the loan needs of enterprises. Currently, lending interest rates of some preferential credit packages are only from 2.5 - 3% / year for short loans and 5 - 6% / year for medium - long-term loans, lower than the input capital costs of commercial banks.
For example, Agribank is applying interest rates of 3% per year with a term of 3 months for 5 priority areas. The normal lending interest rate applied to short-term loans of Agribank is currently 5%/year and medium- and long-term loans are 6%/year; The highest credit card lending interest rate is 13%/year... Or BVBank currently applies interest rates for business loans, buying houses, buying cars from only 5%/year; Sacombank applies interest rates from 3%/year to borrowing needs of individuals and organizations investing in short-term production and business.
Lending rates will remain low between now and the end of the year. Photo: Nhu Y
MBS has just forecast that credit demand will increase sharply from mid-2024 when normally, production and investment activities accelerate in the last months of the year. In fact, credit has grown since March, after going backward in the first 2 months of this year. However, MBS also said that output interest rates remained at the current level in the context of management agencies and commercial banks making efforts to support business to access capital.
Sharing about the orientation of interest rate management, at a recent press conference, Deputy Governor of the StateBank of Vietnam Dao Minh Tu said that interest rate management requires reasonable, because it is related to exchange rate policy. The SBV's position is to lower interest rates but must be in line with the macroeconomic context and inflationary pressures. The State Bank Affirmed that it did not raise the issue of adjusting interest rates, whether increasing or decreasing, but maintaining the current operating interest rate and encouraging credit institutions to further reduce lending rates.
According to data from the State Bank, the average lending interest rate on new loans was 6.4% per year, down0.7% compared to the end of last year. In terms of credit demand, by the end of April, credit growth reached 1.52%, equivalent to about VND 13.78 million billion lent to the economy. Previously, credit growth was negative in the first 2 months of the year.
In particular, BIDV continues to be the champion in customer lending, with a scale of more than VND 1.79 million billion by the end of the first quarter of 2024, up 0.9% compared to the end of last year. VietinBank ranked second in lending, with a balance of VND 1.51 million billion by the end of the first quarter, up 2.8% compared to the beginning of 2024. Vietcombank ranked third with outstanding loans reaching nearly VND 1.27 million billion by the end of the first quarter of 2024, but down 0.3% compared to the beginning of the year.
Next is MB with outstanding loans reaching VND 615,000 billion, up 0.7% in the first quarter of this year. Although earlier, in 2023, MB is one of the banks with the highest credit growth rate (up nearly 29%). At the end of the first quarter, VPBank's consolidated credit increased by 2.1% compared to the beginning of the year, higher than the industry average, reaching nearly VND 613,000 billion.
Meanwhile, Techcombank's credit growth in the first quarter of the year reached 6.4% compared to the beginning of the year toVND 563,900 billion. In addition, ACB has a credit balance of VND 506,000 billion, up 3.8% compared to the beginning of this year; of HDBank reached 6.2%, raising the total outstanding debt to VND 375,385 billion.
Quoted from Tien Phong Newspaper: https://tienphong.vn/lai-suat-cho-vay-van-duy-tri-muc-thap-tu-nay-den-cuoi-nam-post1637441.tpo?fbclid=IwAR15BmLjZPDsaRRS9a0ggeYOfaX0eVJGk9Uf-ApqHuOiiWeLlV0fvEZdDD8
VIETNAM'S ECONOMIC SUCCESS IN THE 21ST CENTURY
The Quest Means Business program on CNN was conducted during Mr. Richard Quest's visit to Vietnam in April this year - a veteran journalist of CNN. In the program, Mr. Don Lam - CEO of VinaCapital Group, expressed the viewpoint that GDP growth, along with an attractive investment environment and a position in the global value chain, are the bright spots of Vietnam's economy.
Moreover, he stated that Vietnam's economy has experienced remarkably impressive growth over the past two decades. The VinaCapital leader believes that Vietnam can further excel in promoting and developing its national economy in the future.
To support these points, he provided specific data. Firstly, Vietnam continues to maintain a strong growth rate, with GDP reaching 6-7% annually. Currently, Vietnam has a population of over 100 million, and notably, they are swiftly transitioning from low-cost garment and electronics manufacturing to semiconductor value chain development.
In March of last year, over 50 American companies came to Vietnam to discuss investment and business opportunities. Among them were familiar names such as Apple, Coca-Cola, PepsiCo and Netflix.
Furthermore, Vietnam and the United States are in the process of elevating their relationship to a Comprehensive Strategic Partnership. Mr. Don Lam sees this as an immensely significant milestone for Vietnam's economy over the past decade. It is considered a "seal of approval" for global corporations to relocate to Vietnam and export to the United States.
Quoted from VnExpress: https://vnexpress.net/viet-nam-la-nen-kinh-te-thanh-cong-cua-the-ky-21-4745370.html
WHY DID THE IMF RAISE THE GLOBAL ECONOMIC OUTLOOK FOR 2024?
The Managing Director of the IMF is Pierre-Olivier Gourinchas. (Photo: THX/TTXVN)
The International Monetary Fund (IMF) recently raised its global economic growth forecast for 2024 to 3.1% due to "bright" signals from the US economy as well as the strong growth momentum of other emerging economies.
Despite challenges from the aftermath of the pandemic and ongoing conflicts, the global economy continues to demonstrate notable recovery potential, with inflation steadily declining and growth being maintained at a stable level. However, according to the IMF, the growth pace will still be sluggish and risks cannot be avoided, but the opportunity for a "soft landing" has increased.
International economic experts believe that "the recovery potential of the US economy is supported by consumer confidence and strong spending, which is a key factor in modifying the IMF's global economic growth forecast."
One of the emerging markets, India, has also shown remarkable growth, with GDP expected to reach around 7% this year. This demonstrates the increasing contribution of emerging markets to the stability of the global economy.
Additionally, China - another highlight for the IMF's perspective, where financial stimulus measures such as tax cuts and increased public investment are gradually playing a significant role in stabilizing the national economy. The Chinese government has adopted a proactive approach to managing economic downturns. With this approach, global commodity demand is expected to recover as many countries consider stronger government and private sector spending solutions.
While the overall outlook is positive, there are still differences in the global economic landscape amid underlying risks. However, the IMF's upward revision of the global economic growth forecast is evidence of the global economy's resilience and adaptability amid significant challenges and uncertainties.
Quoted from Business Forum: https://diendandoanhnghiep.vn/vi-sao-imf-nang-trien-vong-kinh-te-toan-cau-nam-2024-258643.html
MEASURES IN DIGITAL TRANSFORMATION OF THE BANKING INDUSTRY
In implementing national digital transformation, the Prime Minister's guiding view throughout is to take people and businesses as the center. Implementing this direction, the banking industry has set a goal of taking customer experience as a measure in its digital transformation orientation.
On the morning of May 8th 2024, in Hanoi, the Digital Transformation Event of the Banking Industry 2024 took place with the theme "Expanding connectivity and developing the digital ecosystem". This theme affirms the determination of the banking industry in continuing to effectively implement the tasks in the Digital Transformation Plan of the banking industry to 2025, oriented to 2030.
At the recent Banking Digital Transformation event, Governor of the State Bank of Vietnam Nguyen Thi Hong said that the banking sector is closely coordinating with relevant ministries and sectors in digital transformation and achieved many important results.
"Up to now, over 87% of adults have a current account at a bank. Many banks already have more than 95% of transactions processed on digital channels. Growth in the average number of mobile payment transactions and QR Codes over the years from 2017 to 2023 will reach over 100% per year. The interbank electronic payment system processes an average of about 830,000 billion VND/day (about 40 billion USD/day). The electronic financial switching and clearing system handles an average of about 20 to 25 million transactions per day. Vietnam has also completed cross-border payment connection via QR Code with Thailand and Cambodia and is implementing with Laos, expected to continue expanding to countries inside and outside ASEAN."
Reporting on the results of digital transformation of the banking sector, Director of the State Bank's Payment Department - Pham Anh Tuan said that in recent years, the banking industry has actively implemented the digital transformation plan, many targets have approached or exceeded the target set by 2025: At the State Bank, 100% of eligible administrative procedures are provided in the form of comprehensive and integrated public services on the National Public Service Portal; Over 90% of work records are processed and stored. At credit institutions (credit institutions), foreign bank branches, 80% of work dossiers are processed in the digital environment, 55% of banking operations are completely digitized, 49% of customers use electronic payment services, 66% of customers' transactions are made on digital channels, 17 credit institutions have fully digitized with personal and retail loans. Non-cash payment transactions via Mobile, Internet, QR Code channels continue to grow at over 100% per year.
To achieve the above results, the whole banking industry has focused on synchronously implementing many tasks such as: developing and promulgating many policies to promote digital transformation, implementing banking operations by electronic means; invest in upgrading digital storage infrastructure, especially closely coordinating with the Ministry of Public Security in effectively implementing tasks at Project 06 Residential Data Application Center to serve data cleaning, identification and accurate authentication of customer information;
Despite achieving certain achievements, according to Director of the SBV's Payment Department Pham Anh Tuan, the process of digital transformation of banks still has many difficulties and challenges. Therefore, in the near future, the SBV will prioritize focusing on a task such as: Review and evaluate the results, promote the implementation of the tasks in Decision No. 810/QD-NHNN dated 11/5/2021 of the Governor of the SBV; Focus on perfecting institutions, closely coordinating with relevant ministries and sectors to accelerate the review, amendment and promulgation of legal documents promoting digital transformation of the banking sector; Continue to effectively implement the tasks in Plan No. 01/KHPH-BCA-NHNN (coordination plan) dated April 24, 2023 in coordination between the SBV and the Ministry of Public Security to implement the tasks in Project 06; Continue to upgrade and improve technology infrastructure and focus on ensuring information security and confidentiality in the process of digital transformation of banks; Agree to direct the whole industry to arrange and allocate reasonable resources for digital transformation activities and promote the application of digital technology, data analysis to provide convenient products and services to people and businesses;...
Quoted from Banking magazie: https://tapchinganhang.gov.vn/nganh-ngan-hang-quyet-tam-tien-phong-nang-cao-hieu-qua-chuyen-doi-so.html
BANK INSPECTORS, GOLD TRADING ENTERPRISES
On May 17, the State Bank of Vietnam (SBV) issued Decision No.324/QD-TTGSNH2 inspecting the observance of policies and laws in gold trading activities by credit institutions (credit institutions), enterprises (enterprises) engaged in gold trading activities.
The contents of the inspection include the observance of the law on gold trading; anti-money laundering; accounting regimes; preparation and use of invoices and vouchers, and the fulfillment of tax obligations. The inspection period is 45 days, with the scope from the beginning of 2020 to May 15, 2024. "When necessary, it can inspect before or after the above-mentioned period," the State Bank added.
In a newly published report, experts from the Institute for Economic and Policy Research (VEPR) and Think Future Consultancy said that instead of sacrificing foreign currency to import gold massively to stabilize prices, administrative measures such as market inspection, requiring the use of electronic invoices, etc Or investigating price manipulation will bring immediate effects to stabilize the gold market.
Over the past time, implementing the direction of the Government, the Prime Minister, the SBV has implemented solutions to intervene to stabilize the gold market through auctions to sell gold bars to increase supply in the market. The State Bank shall publicly announce information related to the bidding and results of gold bars bidding on the State Bank's portal.
The State Bank of Vietnam said it had intervened to stabilize the gold market through auctions to sell gold bars to increase supply. From April 19 until now, the agency has held 7 auctions to sell SJC gold bars with a total winning volume of 27,200 taels (equivalent to about 1.02 tons).
Next week, the State Bank of Vietnam will continue to hold two gold auctions on May 21 and May 23. In addition, the agency will coordinate with functional sectors to implement comprehensive solutions to definitively handle the high difference between domestic and international gold bar prices. People need to be cautious when participating in gold trading to minimize risks.
Quoted from VnExpress: https://vnexpress.net/thanh-tra-ngan-hang-doanh-nghiep-kinh-doanh-vang-4747486.html