Vietnam News in Brief: Weekly Roundup April 7

Posted by Written by Mark Barnes Reading Time: 4 minutes

Vietnam Briefing keeps track of what’s happening in Vietnam business and economic news so that you don’t have to. Here’s what happened this week.

Economic News

UOB revised GDP growth forecast down

United Overseas Bank (UOB) revised its forecast for Vietnam’s GDP down to 6 percent from 6.6 percent. It said this change was due to the manufacturing sector’s performance which dipped in March on weakening external demand. It also said that it expects the State Bank of Vietnam to lower the refinance rate in the second quarter of 2023 by 100 basis points to 5 percent.

AMRO keeps GDP growth forecast unchanged

The ASEAN+3 Regional Economic Outlook 2023 was released earlier this week. Similar to UOB’s forecast, ARMO says external demand is a challenge for Vietnam’s manufacturing sector. It does also, however, go on to point out the risks in the corporate bond market and real estate sector and says structural reform should be accelerated to mitigate said risks. Overall, it is maintaining its growth forecast of 6.8 percent.

ADB revises GDP growth forecast up

The Asian Development Bank Outlook April 2023 has revised its outlook for Vietnam’s GDP up since its last forecast in December. The ADB is now expecting Vietnam to hit GDP growth of 6.5 percent, slightly higher than the 6.3 percent it estimated at the end of last year.

Tech News

TikTok is being investigated in Vietnam

In line with a number of countries around the world, Vietnam has launched an investigation into TikTok. Specifically, Vietnam’s Ministry of Communications wants the company to better police content it deems ‘toxic’. It has also raised concerns that the popular social media platform’s e-commerce tools may be used to sell fake or counterfeit goods.

See also: How are Foreign Investors Responding to Vietnam’s New Data Localization Regulation

Manufacturing News

Manufacturing outputs dropped again

After a small uptick in February, in March S&P Global’s Purchasing Managers Index for Vietnam turned around and once again dropped. With a score of 47.7 it is once again below the 50 point mark signalling the sector may be contracting. It looks increasingly likely that this number will continue to yo-yo moving forward in line with the global economy.

That said, according to the Vietnam-Briefing FDI Tracker investment in the manufacturing and processing sector is still increasing. About US$1.8 billion was invested in 72 new projects in March, in the sector, up from 25 projects, to the tune of US$1.4 billion, in February.

See also: Vietnamese Garment Makers Hit Snag: Omen or Opportunity?

Real Estate News

‘Codotels’ to come with certificates of ownerships

A condotel is a condominium that is used like a hotel–an Airbnb more-or-less. These have been attractive investments of late, particularly in tourist locations. Purchasers, however, are not granted pink books which are the Vietnamese equivalent to the deed to a house. This has made using these assets as collateral or selling them difficult. This week, however, it was announced this would change. As a result, there may be some increased activity in the holiday real estate sector in the short-term.

See also: Vietnam’s Tourism Industry’s Long Road to Recovery: Explained

Trade News

The UK has joined the CPTPP

The UK has officially been approved to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This is a welcome addition to the UKVFTA currently governing trade between the two countries. It should see tariffs and trade barriers come down sooner in addition to allowing for higher tariff rate quotas on some goods.

Israel and Vietnam have concluded talks on a bilateral FTA

Vietnam and Israel have been negotiating a free trade agreement for the better part of eight years and have finally come to a consensus. Israel’s i24 is reporting that the trade agreement should be signed by the end of the year. Trade between the two countries reached US$2.2 billion in 2022 and should receive a welcome boost particularly in agriculture and technology.

Investment News

Vietnamese healthtech startup receives funding boost from US

Vietnamese healthtech platform BuyMed has been approved for a US$18 million investment from the U.S. International Development Finance Corporation. The deal is set to allow Buymed to extend its services to rural areas of Vietnam. This is yet another in a long line of startups in Vietnam to receive foreign funding.

See also: Investing in Vietnamese Startups: Quick Guide 2023

Singapore firm to develop luxury residences in Vietnam

Singapore’s Banyan Tree Group has signed an agreement with HASCO Group to develop a new Skypark branded residence in Vietnam. As demand for luxury residences has become increasingly popular in the burgeoning Southeast Asian nation, a number of big international brands have entered the market. Just over a month ago Ritz Carlton Residences in Hanoi was topped out and JW Marriott is currently a partner in the Grand Marina Ba Son luxury residences in Ho Chi Minh City.

See also: Vietnam’s Luxury Market: An Appetite for High-End Products

US automaker to start making motorbikes in Vietnam’s north

Polaris is set to invest US$30 million in Vietnam’s Vinh Phuc. The US automobile maker, headquartered in Minnesota, intends to start manufacturing motorcycles for its Indian Motorcycle brand in the northern province. Vinh Phuc is north-west of Hanoi nestled in northern Vietnam’s manufacturing heartland–neighbouring Thai Nguyen is well known for hosting Samsung’s biggest factory in the country.

See also: The Performance of Vietnam’s Key Economic Zones in 2022

Indonesia, US invest in Vietnamese edtech startup

Indonesia’s East Ventures and US firm Cercano Management are investing a combined US$1 million in Vietnamese edtech startup, Prep. This on top of US$1 million the company received last year. The company that specialises in digital learning environments is riding a rising tide in interest in digital learning services in Vietnam. This is being driven by demand for additional learning but that reflects good value for money.

See also: How to Invest in Vietnam’s EdTech Industry

German firm to manufacture cleaning equipment on Vietnam’s central coast

Karcher, a German company that makes cleaning equipment, has broken ground on a new factory in Vietnam’s Quang Nam province. The factory is expected to cost US$21.8 million. It’s expected to employ 300 workers when complete.

See also: Vietnam – Germany Trade: How to Leverage the EVFTA

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