Vietnam’s economic overview (1Q2024)

1. GDP growth

The domestic Gross Domestic Product (GDP) for the first quarter of 2024 is estimated to have increased by 5.66% compared to the same period last year, surpassing the growth rate of the first quarter in the years 2020-2023. In particular, the agriculture, forestry, and fishery sector increased by 2.98%, contributing 6.09% to the overall value-added growth of the economy; the industry and construction sector grew by 6.28%, contributing 41.68%; and the service sector grew by 6.12%, contributing 52.23%.

Within the agriculture, forestry, and fishery sector, the harvest of some perennial crops, primarily livestock products, and aquaculture showed positive growth. The value-added in the agricultural sector in the first quarter of 2024 increased by 2.81% compared to the same period last year, contributing 0.26 percentage points to the overall value-added growth of the economy; the forestry sector grew by 4.08% but due to its low proportion, contributed only 0.02 percentage points; and the fishery sector increased by 3.46%, contributing 0.08 percentage points.

In the industry and construction sector, industrial production performed well and continued to grow since the end of 2023. The overall value-added in the industrial sector for the first quarter of 2024 increased by 6.18% compared to the same period last year (a decrease of 0.73% from the previous year), contributing 2.02 percentage points to the overall value-added growth of the economy. The manufacturing sector is the driving force behind the economic growth with a growth rate of 6.98%, contributing 1.73 percentage points; electricity production and distribution increased by 11.97%, contributing 0.45 percentage points; water supply, waste management, and sewage treatment increased by 4.99%, contributing 0.03 percentage points; however, the mining sector decreased by 5.84% (coal mining decreased by 0.3% and crude oil extraction decreased by 3.2%), resulting in a decrease of 0.2 percentage points. The construction sector increased by 6.83%, significantly higher than the 1.87% growth rate in the first quarter of 2023, contributing 0.4 percentage points.

In the service sector, commercial activities were vibrant, and tourism experienced strong recovery thanks to the effectiveness of favorable visa policies and tourism stimulus programs, leading to a high increase in the export turnover of key products. The contributions of some service industries to the overall value-added growth of the economy in the first quarter of this year are as follows: Warehousing and transportation services increased by 10.58% compared to the same period last year, contributing 0.68 percentage points; accommodation and food services increased by 8.34%, contributing 0.24 percentage points; wholesale and retail trade increased by 6.94%, contributing 0.76 percentage points; financial activities, banking, and insurance increased by 5.2%, contributing 0.32 percentage points; and information and communication services increased by 4.14%, contributing 0.28 percentage points.

Regarding the economic structure in the first quarter of 2024, the agriculture, forestry, and fishery sector accounted for 11.77%; the industry and construction sector accounted for 35.73%; the service sector accounted for 43.48%; and product taxes minus product subsidies accounted for 9.02%.

In terms of the use of GDP in the first quarter of 2024, final consumption increased by 4.93% compared to the same period last year, contributing 56.77% to the overall growth rate; asset accumulation increased by 4.69%, contributing 24.07%; exports of goods and services increased by 18%; imports of goods and services increased by 17.08%, resulting in a trade surplus contributing 19.16%.

2. Industrial production

The value-added of the entire industrial sector in the first quarter of 2024 is estimated to increase by 6.18% compared to the same period last year. Specifically, the manufacturing sector is expected to increase by 6.98%, contributing 1.73 percentage points to the overall economic growth; electricity production and distribution sector to increase by 11.97%, contributing 0.45 percentage points; water supply, waste management, and sewage treatment sector to increase by 4.99%, contributing 0.03 percentage points; whereas the mining sector decreases by 5.84%, resulting in a decrease of 0.20 percentage points.

The consumption index of the entire processing and manufacturing industry in the first quarter of 2024 increased by 8.2% compared to the same period in 2023 (a decrease of 2.9% in the same period in 2023).

The inventory index of the entire processing and manufacturing industry estimated as of March 31, 2024, increased by 9.8% compared to the same period last month and increased by 14.1% compared to the same period last year. The average inventory ratio of the entire processing and manufacturing industry in the first quarter of 2024 is 68.7%.

The number of workers employed in industrial enterprises as of March 1, 2024, increased by 1.3% compared to the same period last month and increased by 1.1% compared to the same period last year.

3. Business registration

In March, Vietnam saw the establishment of 14.1 thousand new enterprises, up by 64.3% compared to the previous month and down by 0.7% compared to the same period last year; over 3 thousand enterprises resumed operations, down by 43.4% and 52%. There were 4,139 enterprises registered for temporary suspension of business operations, down by 19.6% and 0.2%; 4,980 enterprises ceased operations awaiting dissolution procedures, up by 131.3% and 44.3%; and 1,412 enterprises completed dissolution procedures, down by 6.2% compared to February 2024 and equivalent to the same period last year.

In total for the first quarter of 2024, there were 59.9 thousand enterprises registered for establishment and resumption of operations, up by 5.1% compared to the same period last year; on average, nearly 20 thousand enterprises were established and resumed operations per month. The number of enterprises withdrawing from the market was 73.9 thousand, up by 22.8% compared to the same period last year; on average, nearly 24.7 thousand enterprises withdrew from the market per month.

Thus, comparing the number of newly established and resumed enterprises with the number of enterprises withdrawing from the market, in the first quarter of 2024, the total number of enterprises in Vietnam decreased by 14.1 thousand, averaging a decrease of 4.7 thousand enterprises per month.

4. Investment

The total social investment capital in the first quarter of 2024 at current prices is estimated to reach 613.9 trillion Vietnamese dong, an increase of 5.2% compared to the same period last year, reflecting a trend of recovery in domestic production and business in many sectors and fields.

The total foreign direct investment (FDI) registered in Vietnam as of March 20, 2024, including newly registered capital, adjusted capital, and capital contribution value, reached nearly 6.17 billion USD, an increase of 13.4% compared to the same period last year.

The realized foreign direct investment in Vietnam in the first three months of 2024 is estimated to reach 4.63 billion USD, an increase of 7.1% compared to the same period last year.

Vietnam's outbound investment in the first three months of 2024 saw 22 newly certified investment projects with a total capital from Vietnam of 28.7 million USD, a decrease of 74.6% compared to the same period last year. There were 2 instances of capital adjustment projects with the adjusted capital increasing by 220 thousand USD, a decrease of 96.5%. Overall, the total outbound investment capital of Vietnam (including new and adjusted capital) reached 28.9 million USD, a decrease of 75.8% compared to the same period last year.

5. Retail sales of consumer goods and services

The total retail sales of goods and consumer service revenue at current prices in March 2024 are estimated to reach 509.3 trillion Vietnamese dong, an increase of 0.5% compared to the previous month and an increase of 9.2% compared to the same period last year. Overall, for the first quarter of 2024, the total retail sales of goods and consumer service revenue at current prices are estimated to reach 1,537.6 trillion dong, up by 8.2% compared to the same period last year (compared to an increase of 13.9% in the first quarter of 2023), excluding the factor of a 5.1% price increase (compared to a 10.1% increase in the first quarter of 2023).

Passenger transportation in March 2024 is estimated to reach 398.1 million passengers transported, a decrease of 3.8% compared to the previous month, and a circulation of 21.7 billion passenger-kilometers, a decrease of 6.9%. Overall, for the first quarter of 2024, passenger transportation is estimated to reach 1,199.6 million passengers transported, up by 8.5% compared to the same period last year, with a circulation of 66.6 billion passenger-kilometers, up by 10.7%. Freight transportation in March 2024 is estimated to reach 208.1 million tons of goods transported, an increase of 3.1% compared to the previous month, and a circulation of 41.4 billion ton-kilometers, an increase of 0.8%. In general, for the first quarter of 2024, freight transportation is estimated to reach 620.1 million tons of goods transported, up by 13% compared to the same period last year, with a circulation of 129.2 billion ton-kilometers, up by 11.2%.

Telecommunications activities in the first quarter of 2024 are generally stable, with revenue at current prices estimated to reach 89.1 trillion dong, up by 3.4% compared to the same period last year (excluding the factor of a 3.1% price increase).

International visitors to Vietnam in March 2024 reached nearly 1.6 million people, up by 4.4% compared to the previous month and up by 78.6% compared to the same period last year. Generally, for the first quarter of 2024, international visitors to Vietnam are estimated to reach over 4.6 million people, up by 72% compared to the same period last year and up by 3.2% compared to the same period in 2019 - the year before the Covid-19 pandemic occurred.

The number of Vietnamese outbound travelers in March 2024 was 537.4 thousand people, up by 42.7% compared to the same period last year. Overall, for the first quarter of 2024, the number of Vietnamese outbound travelers reached 1.2 million people, up by 11.5% compared to the same period last year.

6. Finance and banking

As of March 25, 2023, the mobilization of capital by credit institutions decreased by 0.76% compared to the end of 2023; the credit growth of the economy reached 0.26%.

The total insurance fee revenue in the first quarter of 2024 is estimated to reach 53.295 trillion dong, a decrease of 4.3% compared to the same period in 2023.

Regarding the stock market, the VN-Index has shown a strong upward trend compared to the end of 2023. Overall, for the first quarter of 2024, the average trading value on the stock market reached 22.529 trillion dong per session, an increase of 28.2% compared to the 2023 average; the average trading value on the bond market reached 9.698 trillion dong per session, an increase of 48.8%.

7. Imports & exports of goods and services

a) Imports & exports of goods

- Export of goods: The export turnover of goods in March 2024 is estimated at 34.01 billion USD, an increase of 37.8% compared to the previous month and a 14.2% increase compared to the same period last year. Overall, for the first quarter of 2024, the export turnover of goods is estimated to reach 93.06 billion USD, up by 17% compared to the same period last year. Within this, the domestic economic sector achieved 25.21 billion USD, an increase of 26.2%, accounting for 27.1% of the total export turnover; while the foreign-invested sector (including crude oil) reached 67.85 billion USD, up by 13.9%, accounting for 72.9%.

In terms of the structure of export commodity groups in the first quarter of 2024, the processed industrial goods group is estimated to reach 82.02 billion USD, accounting for 88.1%.

– Import of goods: The import turnover of goods in March 2024 is estimated at 31.08 billion USD, up by 33.4% compared to the previous month and up by 9.7% compared to the same period last year. Overall, for the first quarter of 2024, the import turnover of goods is estimated to reach 84.98 billion USD, up by 13.9% compared to the same period last year, with the domestic economic sector reaching 29.7 billion USD, an increase of 14.4%; and the foreign-invested sector reaching 55.28 billion USD, up by 13.6%.

In terms of the structure of import commodity groups in the first quarter of 2024, the group of production materials is estimated to reach 79.9 billion USD, accounting for 94%.

– Export and import market of goods: The United States is Vietnam's largest export market with an estimated turnover of 26.2 billion USD. China is Vietnam's largest import market with an estimated turnover of 29.4 billion USD.

In March, the trade surplus is estimated at 2.93 billion USD. Overall, for the first quarter of 2024, the trade balance of goods is estimated to achieve a surplus of 8.08 billion USD (compared to a surplus of 4.93 billion USD in the same period last year). Within this, the domestic economic sector runs a trade deficit of 4.49 billion USD, while the foreign-invested sector (including crude oil) maintains a trade surplus of 12.57 billion USD.

b) Imports & exports of services

In the first quarter of 2024, the export turnover of services is estimated at 5.67 billion USD, an increase of 24.7% compared to the same period last year. The import turnover of services in the first quarter of 2024 is estimated at 8 billion USD (including 2.69 billion USD accounted for in the service fees for transportation and insurance of imported goods), an increase of 26.8% compared to the same period last year. The trade balance of services in the first quarter of 2024 shows a deficit of 2.33 billion USD.

8. Consumer price index and inflation

The Consumer Price Index (CPI) in March 2024 decreased by 0.23% compared to the previous month, increased by 1.12% compared to December 2023, and increased by 3.97% compared to the same period last year. Overall, for the first quarter of 2024, the CPI increased by 3.77% compared to the same period last year; the core inflation increased by 2.81%.

The gold price index in March 2024 increased by 4.59% compared to the previous month; increased by 9.41% compared to December 2023; increased by 22.71% compared to the same period last year; on average for the first quarter of 2024, the gold price index increased by 18.23%.

The US dollar price index in March 2024 increased by 0.88% compared to the previous month; increased by 1.81% compared to December 2023; increased by 4.32% compared to the same period last year; on average for the first quarter of 2024, the US dollar price index increased by 3.97%.

Source: GSO

Compiled by VBI