Vietnam Consumer Confidence On The Rise
By Benedict Lynn
HCMC – Consumer confidence levels in Vietnam have exceeded 100 points for the first time since 2012, currently standing at 102 points, according to survey results released last week by global information and measurement firm Nielsen.
The four point quarterly increase is “the highest level recorded since Q4 of 2013,” notes Nielsen Vietnam managing director Vaughan Ryan, who adds that this shows “positive signs” but that “it is important to acknowledge that overall, Vietnamese consumers are still very cautious as the economy and job security are still the main concerns.”
Vietnamese consumer confidence took a sharp dip in early May as tensions with China flared up when Beijing moved its Haiyang Shiyou 981 rig into disputed waters in the South China Sea. However, statistics released by ANZ banking group and research firm Roy Morgan showed an almost immediate rebound in June with the Vietnam Consumer Confidence Index (CCI) surpassing the 2014 average to 131.0 points (up 7.7 points), and again in August to 135.5 points.
The latest results from Nielsen show that this positive trend is continuing, despite fears it was nearing its peak. Vietnamese households are opting to spend more and save less, indicating a steadily improving economy.
This growing financial confidence has been reflected in encouraging FDI figures. In the first 10 months of this year, according to the Ministry of Planning and Investment’s Foreign Investment Agency, Vietnam attracted some US$13.7 billion of FDI, and FDI disbursement was up 5.9 percent to US$10.15 billion. On Wednesday, Prime Minister Nguyen Tan Dung said that FDI into Vietnam in the first 11 months of this year is expected to be up 6.16 percent from 2013.
FDI plays a crucial role in Vietnam’s economy accounting for a quarter of total investment in the country and 60 percent of export revenue. The government has been lobbying hard to have its market status and credit rating upgraded at various index providers and rating agencies, slashing foreign ownership caps and tightening monetary policy.
Things are looking up for the Vietnamese economy, and will continue to do so as the authorities keep pushing the country’s doors open, ever wider, for business.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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