Vietnam’s Monthly Economic Overview (July 2024)

The socio-economic indicators for July and the cumulative first seven months reveal significant progress across multiple sectors, setting a robust foundation for sustained growth in the forthcoming months and quarters.

1. Industrial Production

The industrial sector sustained its positive growth trajectory. The Industrial Production Index (IIP) for July 2024 rose by 0.7% from the previous month and by an impressive 11.2% compared to the same period last year. For the first seven months of 2024, the IIP increased by 8.5% year-on-year, a notable recovery from the 0.8% decline in the same period of 2023. The manufacturing sector surged by 9.5%, contributing 8.2 percentage points to the overall IIP increase. Electricity production and distribution grew by 12.4%, adding 1.1 percentage points, while water supply and waste management saw a 7.2% rise, contributing 0.1 percentage points. However, the mining sector contracted by 6.2%, reducing the overall IIP by 0.9 percentage points.

Regionally, 60 localities reported an increase in the industrial production index, whereas three localities experienced declines compared to the same period last year. Employment in industrial enterprises as of July 1, 2024, saw a 0.9% month-on-month increase and a 3.3% year-on-year rise, indicating expanding industrial activity and workforce demand.

2. Business Registration

In July, Vietnam recorded the establishment of 14.7 thousand new enterprises, reflecting a 6.3% decrease from June 2024 but a 7.3% increase compared to July 2023. Additionally, 6.8 thousand enterprises resumed operations, marking a 26.2% increase from the previous month, although this figure represents a slight 0.7% decrease year-on-year. Concurrently, 6,837 enterprises registered for temporary business suspension, while 7,035 enterprises ceased operations awaiting dissolution, reflecting respective increases of 26.2% and 30.2% from the previous month. Furthermore, 1,730 enterprises completed dissolution procedures, a 22.4% decrease from the previous month but a 9.4% increase year-on-year.

For the first seven months of 2024, Vietnam saw 139.5 thousand enterprises registering for new establishment and resuming operations, a 5.8% increase year-on-year, averaging over 19.9 thousand enterprises monthly. Conversely, 125.5 thousand enterprises withdrew from the market, a 10.7% increase year-on-year, averaging over 17.9 thousand enterprises monthly.

3. Investment

State budget investment capital continued robust implementation across ministries, sectors, and localities. In July 2024, state budget investment capital reached 57.6 trillion VND, an 8.2% increase month-on-month but a 1.6% decrease year-on-year. For the first seven months of 2024, the total investment capital from the state budget was estimated at 301.5 trillion VND, representing 40.6% of the annual plan and a 2.3% increase year-on-year.

Foreign direct investment (FDI) remained a cornerstone of economic growth. By July 20, 2024, total registered FDI, including new registrations, adjustments, and capital contributions, amounted to over 18 billion USD, a 10.9% increase year-on-year. Realized FDI for the first seven months of 2024 was estimated at 12.55 billion USD, an 8.4% increase year-on-year.

Conversely, Vietnamese outbound investment saw a decline. In the first seven months of 2024, 64 new projects were granted investment certificates with a total capital of 122 million USD, an 18.2% decrease year-on-year. Additionally, 15 projects received capital adjustments, totaling 28.6 million USD, an 83.3% decrease. The total outbound investment for the first seven months of 2024 reached 150.7 million USD, a 53% decline year-on-year.

4. Trade

a) Retail Sales of Consumer Goods and Services

In July 2024, total retail sales of consumer goods and services at current prices were estimated at 528.3 trillion VND, a 9.4% increase year-on-year. For the first seven months of 2024, total retail sales reached 3,625.7 trillion VND, marking an 8.7% increase year-on-year, despite a slower growth rate compared to the 10.6% recorded in the same period of 2023. Adjusted for price factors, retail sales increased by 5.2%, compared to a 9.8% increase in the same period of 2023.

b) Exports & Imports of Goods

In July, the total import-export turnover of goods was estimated at 69.72 billion USD, an 8.7% month-on-month increase and a 21.8% year-on-year rise.

Exports of Goods

July 2024 export turnover was estimated at 35.92 billion USD, a 6.7% month-on-month increase and a 19.1% year-on-year rise. For the first seven months of 2024, export turnover reached 226.98 billion USD, a 15.7% increase year-on-year. The domestic economic sector contributed 63.08 billion USD, a 21.1% increase, while the foreign-invested sector (including crude oil) achieved 163.9 billion USD, a 13.8% increase.

Imports of Goods

July 2024 import turnover was estimated at 33.8 billion USD, an 11% month-on-month increase and a 24.7% year-on-year rise. For the first seven months of 2024, import turnover reached 212.9 billion USD, an 18.5% increase year-on-year, with the domestic economic sector contributing 78 billion USD, a 21.5% increase, and the foreign-invested sector contributing 134.9 billion USD, a 16.9% increase.

Trade Balance

In July, the trade balance recorded a surplus of 2.12 billion USD. For the first seven months of 2024, the trade balance surplus was estimated at 14.08 billion USD, down from the 16.5 billion USD surplus in the same period of the previous year. The domestic sector experienced a trade deficit of 14.92 billion USD, while the foreign-invested sector (including crude oil) enjoyed a trade surplus of 29 billion USD.

5. Consumer Price Index (CPI), Gold Price Index, and US Dollar

The CPI in July 2024 increased by 0.48% month-on-month. Compared to December 2023, the CPI rose by 1.89% and by 4.36% year-on-year. On average, the CPI for the first seven months of 2024 increased by 4.12% year-on-year, with core inflation rising by 2.73%.

The gold price index in July 2024 decreased by 0.12% month-on-month but increased by 18.11% from December 2023 and by 29.39% year-on-year. On average, the gold price index for the first seven months of 2024 increased by 24.77%.

The US dollar price index in July 2024 increased by 0.05% month-on-month, by 4.22% from December 2023, and by 7.14% year-on-year. On average, for the first seven months of 2024, the US dollar price index reflected a steady appreciation.

In conclusion, despite facing numerous global and domestic challenges, Vietnam's socio-economic performance in July 2024 and the first seven months of the year has shown commendable resilience and adaptability. The country's strategic economic policies and proactive measures have fostered growth across industrial production, business activities, investment, and trade, underpinning a positive economic outlook for the remainder of the year.

Source: GSO

Compiled by Vietnam Business Information