Vietnam’s economy in the fourth quarter of 2023 continues its recovery trend from economic growth drivers such as: Public investment acceleration; Newly registered FDI capital and disbursement into Vietnam increased; High trade surplus facilitates stabilization of the domestic currency; Industrial production and Import-Export recovered each quarter; International visitors maintain increasing momentum.
However, the impact of the slow recovery of the world economy is still causing many difficulties for the Vietnamese economy, especially in the export sector. The production sector’s growth was low compared to the pre-pandemic period, business operations encountered difficulties, and domestic consumer demand stagnated.
For 2024, Agriseco Research expects factors such as public investment, FDI capital and stimulus support policies Government consumption will be the main driving force driving economic growth. The government has set a target GDP growth in 2024 is about 6 – 6.5%, significantly higher than the implementation level of 5.05% in 2023. while continuing to maintain stable inflation around 4 – 4.5%.
According to Agriseco Research’s assessment, the above indicators show both advantages and disadvantages for the stock market.
In which, the advantage is tThe economic growth rate in 2023 is improving, the next quarter is higher than the previous quarter thanks to fiscal, monetary and consumer stimulus policies.
Business results in the fourth quarter of 2023 of businesses are expected to recover more clearly than the low base of the same period. Some industries are expected to grow in profit compared to the fourth quarter of last year such as securities, construction materials, infrastructure construction…
A number of policies have been approved at the National Assembly session and are expected to be implemented in the coming period such as: Housing Law, revised Real Estate Business Law, extension of 2% VAT reduction, additional budget sources. Medium-term public investment… is expected to absorb and support economic growth in 2024, creating investment opportunities with related industry groups.
At the same time, a low interest rate environment will help reduce businesses’ financial costs. In addition, credit is accelerated in the last months of the year and the credit growth target of 15% in 2024 (higher than the 2023 target of 14%) will be a sign to help businesses have favorable conditions. increase operating scale and revenue.
Public investment is expected to continue to become the main growth driver in 2024, helping many industries benefit, notably the group of construction materials and construction businesses. However, it should be noted that the public investment story is an expectation and will not be reflected in the 2023 business results of businesses when many businesses in this group have reported negative business growth results.
FDI capital invested in Vietnam is forecast to grow positively amid the trend of supply chain restructuring. Disbursed FDI capital in 2023 has reached the highest level in the past 5 years, which is expected to help industrial park real estate businesses benefit, especially in areas that attract large FDI capital.
However, Agriseco Research also believes that there are still difficulties such as:Although the production and export sectors have improved, they are still facing many difficulties in general, and the number of businesses withdrawing from the market continues to increase. Business results of many industry groups continued to suffer losses, production and business activities shrunk. Monthly PMI below 50 points for 5 consecutive months. These factors reduce investors’ expectations for a rebound in 2024.
Although export turnover has recovered, it is still slow compared to expectations, which could affect the outlook for business results in 2024. Summary of GDP growth forecasts in Vietnam’s main export markets such as the US , China and Europe are mostly expecting a deceleration in 2024 that could reduce the recovery momentum for related export industry groups.
The international macro situation is becoming complicated, with the Fed maintaining high interest rates, fierce strategic competition among major countries, and recessionary pressure in many countries. These factors will continue to negatively affect the global economy in general and the stock market in particular.