Vietnam 20240711: Deft, Nimble, Savvy

Mekong Memo Vietnam Weekly: Business, politics, finance, trade & legal news.

Jul 11, 2024

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Headlines:

Economic Winds Shift as Growth Accelerates

Diplomatic Tightrope Act Starts to Pay Off

Expats Find a Wallet-Friendly Haven

Consumers Tighten Belts as Uncertainty Looms

Massive Alcohol Tax Hike Threatens Industry

Export Bonanza with Digital, Tea, and Ag Leading

Keeping the Lights On, Going Green

Family Fun Meets High-Tech Holidays

Local Firms Playing Digital Hide-and-Seek

FDI Bonanza: Silicon Dreams to Mountain Schemes

Implications of US Call on Market Economy Status

Hanoi in Housing Hustle Despite Developer Doldrums

Airports to Expand, International Traffic Rebounds

Workers' Wallets Fatten, Businesses Tighten Belts

Infrastructure Overdrive

YouTubers Fined for Rocky Impersonation

Economic Winds Shift as Growth Accelerates

The national economic engine is revving up, with GDP growth hitting 6.42% in the first half of 2024. Optimistic forecasters are now eyeing a 7% finish line for the year. Manufacturing, services, and exports are leading the way, leaving regional peers in the dust. The government is pushing for a 6.5-7% sprint in Q3, but hurdles remain – not least the molasses-like pace of public investment disbursement. Still, as foreign investors line up, Vietnam's economic story is looking increasingly like a page-turner.

Read more: Nhan Dan (Outlook), Vietnam Investment Review (H1 Growth), Nhan Dan (CIEM Forecast), The Star (7% Possibility), Nhan Dan (PM Directive)

Diplomatic Tightrope Act Starts to Pay Off

In a masterclass of geopolitical juggling, Vietnam has hosted top brass from the U.S., China, and Russia's all within nine months while India is finding itself in a diplomatic tangle with the exact same players. All is not just handshakes and photo ops, however, Vietnam is reaping real economic rewards. As global firms continue to try and diversify (“friendshore”), Vietnam's manufacturing sector is pulling in more work than India. It seems that Hanoi's free trade savvy is, at least for the moment, trumping New Delhi's protectionist playbook.

Expats Find a Wallet-Friendly Haven

A recent survey has crowned Vietnam as 2024's most affordable expat destination. From bargain street food to budget-friendly rent, Vietnam offers a comfortable lifestyle without breaking the bank. This stands in contrast to the typically expensive locales that feature in expat dreams, proving that sometimes, the most attractive destinations are also the most economical.

Consumers Tighten Belts as Uncertainty Looms

Vietnamese shoppers are feeling the pinch, with 62% opting for home-cooked meals over restaurants and forgoing luxury items. Half are postponing major purchases, while 40% are scrutinizing every expenditure. Yet, in a twist that might perplex economists, retail sales still managed to climb 8.6% in the first half of 2024. It appears Vietnamese consumers have mastered the art of prudent spending without completely closing their wallets.

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