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CALM SEA BEFORE UNCERTAINTY

The growth momentum in the last quarter of the year still depends on exports and industrial production but at a slower pace of growth. The October PMI increased to 51.2 points, while the manufacturing industry recorded a growth rate of 8.8% compared to the same period last year.
Service consumption has not improved in recent quarters, posing a challenge for recovery in the remaining two months of 2024. The manufacturing industry continues to be divided as sectors such as electronics and wood slow down while footwear and apparel improve slightly. Electricity production growth reached its lowest level since the beginning of the year, with export orders increasing only slightly (export PMI reached 50.7 points).
We expect GDP growth in Q4/2024 to reach 7.0-7.5%, but lack new supporting factors.
Public investment remains a challenge as the cumulative disbursement in 10M2024 only reached VND380 trillion, equivalent to 47.2% of the plan. We expect the whole year to reach VND689 trillion, equivalent to 85.5% of the plan, the critical point being the more robust disbursement rate in big cities such as Hanoi and Ho Chi Minh City.
Banking system liquidity is under pressure as the SBV withdrew VND124 trillion net in October 2024, while interbank interest rates skyrocketed to 6%. The upward trend in deposit interest rates may continue in the next two months but is still within the expected range.
Pressure on exchange rates remains due to the strong USD. However, the exchange rate developments at the end of the year are under control