HSBC to give positive comment on Vietnam economic indicators

According to HSBC, that Moody's changes the outlook on Vietnam's ratings to "positive" from "stable" is an encouraging improvement.

The latest survey of Purchasing Managers’ Index (PMI) has shown that Vietnam’s overseas demand reached a record high in April, allowing manufacturers to be strongly confident that the output will increase in the next 12 months thanks to more new orders and business expansion plans.

Vietnam has become an important part of regional supply chain for electronic products, especially mobile phone, Vietnam's largest export commodity.

HSBC forecasts that new product launches and recovering global demand reflected in the PMI survey will sharply drive up QIII's exports.

Vietnam's exports rose 16% in April yoy, while the figure for last month increased by 14.3%.

Foreign investment sector's exports went up rapidly by 21.5% compared to 13.1% of the previous month, while the domestic sector increased by 3.7%, down from 17.2% of March.

Interestingly, exports of telephones and spare parts, Vietnam's largest export items, rebounded at 17.5% after declining by 13.3% last month.

However, other important export items including textiles and footwear slowed down in April.

Meanwhile, slower import growth, which remained at 23.8% in April, has helped narrow the trade deficit.

The manufacturing sector continues to receive support from foreign investment.

Vietnam has received about US$4.8 billion FDI so far this year, up 3.2% from the previous year.

According to HSBC, the current macroeconomic stability will help maintain the stable FDI inflows in the future.

Another aspect of the economy, inflation has gradually been eased, down to just 4.3% in April from 4.6% last month. The core inflation has fallen to 1.5% (compared to 1.6% previously).