World Bank says Vietnam's economic recovery remains strong

Economic recovery remained strong despite heightened global uncertainties, while export growth slowed and import growth plateaued, it said.Sale of consumer services, which was hit harder than the sale of goods last year, experienced a stronger rebound of 41 per cent YoY compared to a rise of 18.3 per cent YoY of goods in May.

Foreign direct investment (FDI) commitments were $879 million in May, the lowest level since September 2020, and nearly 50 per cent lower than a year ago. This is the fourth consecutive month of decline, reflecting the heightened economic uncertainties caused by the protracted war in Ukraine and the health-related lockdowns in China.

On the other hand, FDI disbursement remained strong in May, up by 8.5 per cent YoY, marking a six-month expanding streak.

Consumer price inflation edged up from 2.6 per cent in April to 2.9 per cent in May, driven by a rise in gasoline and diesel prices, which were 54.5 per cent higher in May than a year ago. Producer price inflation showed signs of easing in May, with both input costs and output prices rising at the slowest rates in three months, according to Vietnamese media reports.

Thanks to strengthening domestic demand, total revenue collection increased by an estimated 29.4 per cent year on year in May, keeping the budget in surplus for the fifth consecutive month.

The World Bank recommended that Vietnamese authorities should be vigilant about inflation risks associated with continuing rise in prices of fuels and imports, which may dampen the ongoing recovery of domestic demand. Temporary support, including targeted transfers, should be considered to help poor households weather the price surge.

Investing in alternative energy production would reduce the economy’s dependence on imported fuels in the medium term and promote greener growth, the global financial organisation added.

ALCHEMPro News Desk (DS)