Henig:  Standard Chartered forecast Việt Nam 2023 GDP growth at 7.2 per cent

January, 10/2023 – 07:31

Standard Chartered Bank expects Việt Nam’s strong growth of 7.2 per cent in 2023 and 6.7 per cent in 2024, following a solid recovery to 8.0 per cent in 2022.

HÀ NỘI Standard Chartered Bank forecasts Việt Nam’s economic growth at 7.2 per cent in 2023 and 6.7 per cent in 2024, following a solid recovery to 8.0 per cent in 2022.

The forecast is highlighted in the bank’s recently published global research report on Việt Nam titled “Việt Nam – Still enjoying high-growth status”.

“We still have a conviction on Việt Nam’s high growth potential over the medium term,” said Tim Leelahaphan, Economist for Thailand and Việt Nam, Standard Chartered. “While macro indicators moderated somewhat in Quarter 4 2022, they remain largely robust. Retail sales posted solid growth in the second half of 2022, implying improved domestic activity.”

According to Standard Chartered’s economists, trade balance has tentatively improved; exports may face global headwinds; imports are at risk of reversal. FDI disbursements have continued to increase, but the outlook hinges on the global economy. Inflation may pose a threat to Việt Nam’s continued recovery.

Inflation is anticipated to rise throughout 2023, potentially reaching 6 per cent in the final months of the year and averaging 5.5 per cent in both 2023 and 2024 (from 3.2 per cent in 2022). Việt Nam’s fiscal deficit may persist and be a source of inflation.

Standard Chartered Bank expects the State Bank of Vietnam (SBV) to hike rates by another one per cent in Quarter 1 2023 and to stay on hold through end-2024 as it shifts to a tightening stance with a view to maintaining stability.

“We expect the central bank to stay vigilant against inflation, a weakening Vietnamese đồng, and financial instability arising from risky loans in the real-estate sector. The SBV may prefer a relatively strong Vietnamese đồng, as long as it does not harm the country’s trade competitiveness,” said Tim Leelahaphan, Economist for Thailand and Việt Nam, Standard Chartered.

According to Tim, the Vietnamese đồng has recovered sharply in recent weeks, however, the pace of Vietnamese đồng appreciation is likely to slow down, as several headwinds persist. The replenishment of FX reserves is likely to be a key priority for the central bank. An improving Current Account backdrop and tourism recovery is likely to be supportive to the Vietnamese đồng. USD-VND is forecast at 23,400 by end-2023 and 23,000 by end-2024.



Henig:  Some shipping companies confront hardship, some benefit

January, 10/2023 – 08:31

In the context of rising interest rates and rising US dollar, many port and shipping companies are confronting difficulties, but there are still beneficiaries.

HÀ NỘI In the context of rising interest rates and the rising US dollar, many port and shipping companies are confronting difficulties, but there are still beneficiaries.

Good growth in 2022

According to the Việt Nam Maritime Administration, in 2022, the total volume of cargo throughput via seaports was estimated at 733.18 million tonnes, up 4 per cent compared to 2021. Exports reached 179.07 million tonnes, down 3 per cent compared to 2021. Imports reached 209.26 million tonnes, down 2 per cent. Domestic goods reached 342.79 million tonnes, up 12 per cent. The volume of container cargo through the seaports in 2022 was estimated at 25.09 million TEUs, up 5 per cent compared to 2021.

At the conference held last month by the Việt Nam Maritime Administration to evaluate the work results in 2022 and deploy the key tasks in 2023, Deputy Minister of Transport Nguyễn Xuân Sang assessed that the Vietnamese fleet has met 100 per cent of the demand for goods transportation. The volume of cargo transported on international routes of Việt Nam’s fleet in 2022 increased by more than 10 per cent compared to last year, reaching nearly 1.3 million tonnes of cargo.

“Revenue and profit of shipping companies both increased, possibly partly due to increased freight rates, but fleet quality also continued to improve, so did the fleet structure,” Sang said.

According to VNDirect’s estimates, in the first nine months of 2022, the revenue of listed shipping companies increased by 73.7 per cent over the same period of the previous year, mainly thanks to the high sea freight rates contracted by the companies. Gross profit margin also improved by 13.0 percentage points due to the increase in scale. As a result, net profit of listed shipping companies increased by 70.8 per cent, in which The Hải An Transport and Stevedoring JSC (HAH) recorded the strongest net profit growth of 171.8 per cent thanks to strong fleet expansion in 2022.

However, in the international market, after a period of rapid growth, sea freight rates suddenly dropped. This is the result of the weakening of global freight demand while the market expects an increase in supply in the near future.

According to Alphaliner, the number of new shipbuilding orders continues to increase, bringing current orders to 27.9 per cent of total market capacity, the highest level since 2012. The global fleet could grow by 4.4 per cent and 8.2 per cent year-on-year in 2022 and 2023 due to new orders being delivered, while global cargo throughput may increase only by 0.9 per cent and 2.7 per cent in 2022 and 2023 due to the global economic recession.

VNDirect forecasts that the oversupply will put great pressure on sea freight rates in the near future. Business results of shipping lines see a certain lag with fluctuations in sea freight rates because charter contracts usually last from 6 to 12 months. Therefore, the impact of the reduction in sea freight rates will begin to reflect on the business results of shipping companies in the 2023-2024 period.

However, analysts still see a number of positive factors that could somewhat mitigate the negative impact of the price reduction. First, China is on track to reopen, which will boost global trade and consumption. Second, the average Brent oil price is forecast to remain around $90 per barrel in 2023, which will help reduce fuel costs for shipping companies.


In 2023 – 2024, VNDirect believes lower sea freight rates will support global trade activities. Besides, the shortage of containers – the main factor causing seaport congestion – will be solved thanks to the additional volume of containers. With ports operating at 100 per cent capacity after the pandemic, the number of ships waiting in line has been eased in the main port areas. The reopening of China could offset the weakening global economy, providing a neutral outlook for the global port industry.

Experts also expect that Việt Nam’s container throughput will increase by 2.5 per cent year-on-year in 2022 to 24.9 million TEUs after a growth of 2.9 per cent in 10 months of 2022.

In the seaport master plan for the 2021 – 2030 period, among Việt Nam’s major port clusters, Hải Phòng port cluster and Cái Mép – Thị Vải port cluster are classified as Việt Nam’s special port clusters and will be most developed. Therefore, these two port clusters will have more growth potential in 2023 – 2024

For businesses, VNDirect believes that the interest rate increase will help Port of Hải Phòng JSC (PHP), Việt Nam Container Shipping Joint Stock Corporation (VSC) and Việt Nam Ocean Shipping JSC (VOS) benefit in the near future. Of which, PHP will be the most profitable. In contrast, Hải An Transport and Stevedoring JSC (HAH) and Gemadept Shipping Holding Co Ltd (GMD) may be affected because these companies plan to expand scale in the future.


Henig:   Cashew industry expects another tough year amid global demand slump, high raw material prices

January, 10/2023 – 08:28

Last year was a challenging one for the cashew industry, with exports falling from the previous year, but 2023 might be even worse, according to the Việt Nam Cashew Association (VINACAS).

HCM CITY — Last year was a challenging one for the cashew industry, with exports falling from the previous year, but 2023 might be even worse, according to the Việt Nam Cashew Association (VINACAS).

Exports were worth US$3.07 billion against the target of $3.2 billion, a $600-million reduction from the initial target, Bạch Khánh Nhật, the association’s deputy chairman, said.

Thus, 2022 marked the end of a decade during which exports rose steadily, he told a review meeting held in HCM City late last week.

According to the association, there were a number of reasons for exports to fall.

The price of raw cashew stayed very high and processing costs were also high, but export prices were low, meaning exporters were reluctant, it said.

China, one of Việt Nam’s major cashew markets, last year maintained a zero COVID policy, making it difficult to ship to the market, it said.

Nguyễn Minh Họa, the association’s deputy chairman, said the energy and food crisis has driven up inflation around the world, affecting consumer spending.

“So people spent more money on essential needs, and reduced spending on discretionary items such as cashew nuts. The situation is expected to continue this year, cashew demand will be low and it will be difficult for prices to increase.”

According to the VINACAS Information Council, in 2023 cashew production and supply chains will continue to face challenges due to factors such as the Russia-Ukraine conflict, inflation and recession, the State Bank of Vietnam’s credit tightening, USD/VND exchange rate volatility, decline in demand, and increase in processing costs.

So, after careful consideration, VINACAS’ executive board has set a modest export target for 2023 of $3.1 billion.

Delay import of raw cashew

Họa said the number of new export orders signed for this year has fallen to a one-tenth of the normal.

“Usually, at the beginning of the year, businesses signed contracts for at least until the third quarter. But this year most importers in the US and EU do not plan to import cashew until the end of the second quarter.”

Amid lower demand and export prices, the association and businesses at the meeting said there should be no rush to import raw cashew, whose prices remain high.

Họa said last year exports of W320 grade cashew nut (the highest grade based on shape and colour) fetched $2.95-3.1 per pound while raw nuts were priced at $1,200 per tonne.

Now W320 cashew prices have fallen to $2.5-2.6, but Ivory Coast still sells raw cashew at $1,200, even $1,240, he said.

Firms need to carefully study the market and draft appropriate plans for imports, he added.

Last year Việt Nam imported 1.9 million tonnes of raw cashew, slightly lower than in 2021.