Vietnam Consumer Confidence on the Rise
HANOI – The last half of 2013 saw a marked increase in consumer confidence throughout Vietnam. The country is experiencing cautious optimism as positive economic numbers start to be reported.
Consumers in Hanoi, in particular, are growing in confidence about the future of the country’s economic prospects in 2014.
The Ministry of Planning and Investment’s National Centre for Socio-Economic Information and Forecasting (NCSEIF) recently conducted a survey looking at consumer sentiment over the previous six months. Among the survey’s findings were:
- 41.7 percent of consumers in the last six months of 2013 described the economic situation as good, compared to 3 percent that rated the economy as good in the first six months of 2013
- 39.4 percent of respondents described the economic situation as bad (down from 54 percent)
- 65.9 percent reported that their employment was more stable in the second half of the year as compared to 52.4 percent in the first half
- 31 percent reported that their employment was unstable, a reduction from the previous 44.3 percent
According to government analysis of the survey, the results “show that the economy has been showing very positive changes… It also shows that Hanoi’s economy in general and household employment and incomes in particular have been improving. Household and individual spending are increasing, meaning that the city’s consumption is growing.”
However, there are still areas of concern within the economy. While the prices of water, electricity, gas, and petrol have all seen their prices increase, salaries have remained flat.
During 2013, petrol prices increased 4.48 percent while gas prices saw a seven-fold increase.
According to the NCSEIF, in 2014, the Vietnamese government is expected to increase power prices by 11 percent and another 11 percent in 2015. These numbers are based on the government’s average power retail price framework for 2013-2015 which was enacted last month.
Pho Thi Kim Chi, a representative from the NCSEIF, explained that the price increases will “have the biggest impact on the prices of garments, footwear, home appliances, and housing and construction material.”
The NCSEIF has also predicted a 20 percent increase in the price of medicine and medical services for 2014 and again in 2015. As a result, the country’s consumer price index (CPI) is expected to rise 0.71 percent.
The country’s property market has seen positive growth as consumer sentiment continues to warm. The real estate sector saw a 26.5 percent decline in inventory from the first quarter of 2013. The property market had been essentially at a standstill over the past few years.
Going into 2014, however, there are now signs of real movement.
“Higher than average credit growth for the real estate market had helped speed up the construction of unfinished projects, which had stagnated due to a lack of capital,” stated Trinh Dinh Dung, Minister of Construction.
Consumer confidence has reacted very positively to these developments.
Adding to the trend already identified, the Ministry of Construction also found that Hanoi had around 6,450 real estate project transactions; about half of these were conducted during the fourth quarter of last year. Ho Chi Minh City saw 9,360, with almost 70 percent of them occurring in the second half of 2013.
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