At Cat Lai ICD in Ho Chi Minh City. (Photo: VNA)Industrial production continued a robust expansion of 10.4percent year-on-year while retail sales rebounded with growth of 4.2percent month-on-month and 22.6 percent year-on-year, suggesting strongrecovery of private consumption.
About 173,000 international visitors arrived in May, about70 percent higher than in April and the highest figure since April 2020, yet stillless than 16 percent of pre-pandemic levels.
Sales of consumer services, which were hit harder than thesales of goods last year, experienced a stronger rebound (41 percent year onyear compared to 18.3 percent year on year, respectively).
The rebound was due to the booming accommodation andcatering services, which increased by nearly 70 percent and were 12.4 percenthigher its pre-pandemic level three years ago. Travelling also tripled comparedto a year ago although it was about 60 percent lower than its pre-pandemiclevel.
Amid heightened global uncertainties, export growth slowedand imports growth plateaued.
FDI commitments were 879 million USD in May, the lowestlevel since September 2020, and nearly 50 percent lower than a year ago. Thisis the fourth consecutive month of decline, reflecting the heightened economicuncertainties caused by the protracted war in Ukraine and the health-related lockdownsin China.
On the other hand, FDI disbursement remained strong in May,up 8.5 percent year on year, marking a six-month expanding streak.
CPI inflation edged up from 2.6 percent in April to 2.9percent in May driven by a rise in gasoline and diesel prices, which were 54.5percent higher in May than a year ago. Producer price inflation showed signs ofeasing in May, with both input costs and output prices rising at the slowestrates in three months.
Credit growth remained strong at 16.9 percent year on yearwhile overnight interbank interest rates dropped sharply from 1.73 percent inApril to 0.33 percent as of the end of May.
Thanks to strengthening domestic demand, total revenue collection increased byan estimated 29.4 percent year on year in May, keeping the budget in surplusfor the fifth consecutive month.
The WB recommended that Vietnamese authorities should bevigilant about inflation risks associated with continuing rise in prices offuels and imports, which may dampen the ongoing recovery of domestic demand.Temporary support including targeted transfers should be considered to helppoor households weather the price surge.
As the commodity price shock appears to be mainly affectingoil and fuels, with passthrough to transport costs, temporary targeted subsidyfor main gasoline and fuel users (such as truckers) could also be considered toalleviate hardship and blunt the inflationary pressures.
Investing in alternative energy production would reduce theeconomy’s dependence on imported fuels in the medium term and promote greenergrowth./.
VNA
