Vietnam’s economic industry in Q4/2022 – Prospects & challenges in 2023
According to newly released data from the General Statistics Office, Vietnam’s GDP in the third quarter of 2022 was quite high, increasing by 13.67% over the same period in 2021 – contributing to boosting growth in the first 9 months of 2022 to 8.83% which is the highest level since 2011.
In the third quarter of 2022, economic industry showed an even recovery in all regions. The manufacturing and processing sectors (up 13% over the same period in 2021) and consumption (up 10% over the same period in 2021) are the main drivers for the above impressive growth.
In the fourth quarter of 2022, economic industry continued to grow in most industries and fields. However, the growth rate tends to slow down. The reason is that the world economy is complicated and unpredictable, with high inflation, low growth, political instability, armed conflicts, natural disasters, epidemics, climate change, etc. increasing risks to financial markets, currency, energy security, and global food security.
Nevertheless, Vietnam is still one of the promising countries that investors pour money into and evaluates as a potential market in 2023.
Reasons for Vietnam’s economic industry growth and stability in 2022
Vietnam’s economic industry grew and stabilized thanks to the strong increase in purchasing power after the Covid-19 pandemic. Especially because the regulatory policy of the state helps stabilize socio-political, macro-policy, economic policy, investment policy; openness, and integration with the world economy, helping to uncover the world economy for Vietnam.
In addition, Mr. Dominic Scriven, Executive Chairman of Dragon Capital, emphasized that the global instability is mainly due to the food and energy crisis. But Vietnam does not seem to be too affected by controlling these two factors.
Regarding food, Vietnam is a large and relatively stable producer, although it is difficult to fully control prices and output in the market. In terms of energy, Vietnam has a relative energy production capacity, while the amount of petroleum imports is not too large compared to the size of the whole economy.
In the context that global supply chains are being restructured and many foreign businesses are paying attention to Vietnam, Mr. Dominic Scriven pointed out a great development opportunity for the Vietnamese economy in 2023 – which is recognized by Mr. Dominic Scriven. considered as a production center for the Asian market.
A picture of key economic industry in Vietnam in Q4/2022
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Export of Vietnamese rice
VIRAC assumes that the demand for rice is increasing sharply in Asian countries in the second half of 2022. Climate change causes many extreme weather patterns, affecting agricultural production. of many countries.
Besides, according to data from the General Department of Customs, Vietnam’s rice exports in October 2022 reached 713,546 tons, worth $341,064 million, up 22.3% in volume and 23.9% in value over the same month. September 2022. By the end of October, Vietnam’s rice exports reached nearly 6.1 million tons, worth about 3 billion USD (up 17.4% in volume and 7.6% in value over the same period in 2021).
In the last 2 months of 2022, if each month reaches the minimum level of 600,000 tons, this year’s rice industry will export 7.2-7.3 million tons, the second highest in history. In particular, currently, the price of Vietnamese rice is maintained at the highest level in the world, with a gap of 20-50 USD/ton compared to Thai and Indian rice.
In mid-December, the price of rice reached 450-455 USD/ton, a sharp increase of 5 USD compared to the previous month. This is believed to be the highest price since July 2021.
One of the reasons is that the Indonesian government has agreed to urgently import 200,000 tons of rice in December 2022. This is a part of the government’s plan to import up to 500,000 tons of rice to ensure food supply and reserves to cope with inflation.
Besides Indonesia, the Bangladesh government also opened an international bid to buy 50,000 tons of rice to serve domestic consumption. The deadline to receive bids is December 21. This shows a great opportunity for Vietnam’s rice exports.
Read more: The export price of Vietnamese rice is the highest in the world in 2022
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Aquaculture industry
By the end of November 2022, the picture of Vietnam’s seafood industry set a new record. Although there are still many difficulties, it is predicted to reach 11 billion USD in 2023. Most of the reason is due to the economy. Vietnam’s economy and business environment are stable, favorable, and less volatile, so businesses know how to take advantage of opportunities to turn challenges into opportunities to find new potential markets that open up bright prospects in 2023.
Quantity
In November 2022, because of the high price of raw pangasius, pangasius production reached 167.8 thousand tons, up 9.2% over the same period last year; in the first 11 months of 2022, reaching 1,525.5 thousand tons, up 14%. Due to the application of the high-tech intensive shrimp farming model, super-intensive shrimp farming has brought positive effects. Farmed shrimp production in November 2022 reached 101.3 thousand tons, up 4.2% over the same period last year; in the first 11 months of 2022, hitting 988.5 thousand tons, up 9%.
Export
However, seafood export value fell to a negative level (down 14%) over the same period last year, reaching only about 780 million USD. But in November 2022, Vietnam’s seafood exports reached 10.2 billion USD, up nearly 28% over the same period in 2021.
To the report of Vietnam’s seafood industry in the third quarter of 2022, in November, exports of shrimp, pangasius, and tuna all decreased by 20-26% over the same period last year. Particularly, exported squid, octopus, and marine fish still maintained positive growth of 9% and 6%, respectively.
Many seafood enterprises said that orders dropped sharply not only for high-priced items such as black tiger shrimp, and large white leg shrimp, and high-class seafood such as squid, octopus, and tuna, etc. but also products. Moderately priced shrimp such as small shrimp, pangasius, small sea fish, fish cakes, surimi, etc. have also been significantly reduced.
In the last months of 2022, seafood export activities in particular, and export items, in general, will face many challenges. While gasoline prices continued to fluctuate, putting pressure on inflation, causing domestic commodity prices to rise, and affecting consumer demand for trade.
The most worrying thing is that the rising USD will hurt imports and export because Vietnam currently imports many raw materials for export. In particular, the seasonality also shows that growth has slowed down quarter-on-quarter. It is forecasted that the prospect will be more difficult in the coming time for Vietnam’s trade activities.
Read more: Evaluation of the seafood industry in the first 9 months of the year and prospects for Q4/2022
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Logistics industry
According to the Vietnam logistics industry report in the third quarter of 2022 (by VIRAC), the compound annual growth rate will reach 5.5% in the period 2022 – 2027, parallel with the rapid recovery of the entire economy after the COVID-19 pandemic. After 9 months of 2022, GDP will reach 8.83%. This shows the great development opportunity for Vietnam’s logistics market in 2023.
In addition, in 2022, the “throne” of shipping trends due to the explosion of e-commerce, the positive influence of e-logistics, and the new supply chain in the digital economy have helped Vietnam become a potential emerging logistics market, promising many new opportunities and prospects in 2023.
Also in 2022, according to statistics across the country, Vietnam currently has 30,000 enterprises operating in the field of logistics. Among them, more than 5,000 enterprises run in the field of international logistics, and 69 logistics centers are large and medium-sized, attracting investment in many fields.
At the same time, 89% are Vietnamese small and medium-sized enterprises, 10% are joint ventures and 1% are 100% foreign-owned enterprises providing cross-border logistics services.
Read more Logistics industry news: Will Vietnam’s logistics industry make a breakthrough in 2023 by seizing the opportunity?
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Steel industry
Steel consumption in Vietnam decreased in October 2022 compared to the previous month and the same period last year, according to updated data from the Vietnam Steel Association. This was due to weak demand, which caused many steel companies to suffer losses in the third quarter of 2022.
For example, Hoa Phat Group reported a negative profit after tax of VND 1,786 billion. Hoa Sen Group Joint Stock Company also incurred a loss of about VND 887 billion in the third quarter.
The steel industry in 2022 has experienced a significant decline in demand, leading to slow consumption by Vietnamese enterprises and increased inventories. Input costs have remained high, and loan interest rates and exchange rate fluctuations have added to the challenges faced by steel companies.
Many experts predict that this challenging period for the steel industry may continue to affect the industry in 2023. However, there is a bright spot for the steel industry in 2023, primarily due to the demand from the Chinese market.
The Chinese government‘s policies to stimulate the real estate market are expected to become effective, which will help Vietnam’s steel industry overcome the current difficulties.
Read more: The prospect of the steel industry is “brighter” in 2023
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Retail Accommodation Industry
Total retail sales of consumer goods and services in November were estimated to increase by 2.6% over the previous month and 17.5% over the same period last year; in the first 11 months of 2022, an increase of 20.5% over the same period in 2021. Revenue from accommodation and catering services increased by 56.5% over the same period last year; tourism revenue is 4.1 times higher.
Passenger and cargo transport activities grew strongly compared to the same period last year. Passenger turnover in November 2022 increased by 3.1 times, cargo turnover increased by 29.8%.
International visitors to Vietnam in November reached 596.9 thousand arrivals, an increase of 23.2% over the previous month and 39.7 times higher than the same period in 2021 because Vietnam has opened up tourism and international routes. In the first 11 months of 2022, international visitors to our country reached 2,954.2 thousand arrivals, 21.1 times higher than the same period last year.
Read more: Attractive Vietnam retail market 2022 draws foreign businesses
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