- IIP improved in April. In April, the overall index of industrial production (IIP) grew 6.3% YoY (vs -2.4% YoY in April 2023) with the IIP of manufacturing rising 7.0% YoY (vs -2.8% YoY in April 2023). In 4M 2024, the overall IIP grew 6.0% YoY (vs -1.8% YoY in 4M 2023), in which the IIP of the manufacturing sector increased 5.9% YoY (Q1 2023: -2.4% YoY). The solid recovery in new orders reported in the newest PMI survey could support the ongoing improving of production in the coming months.

- Strong international arrivals continued to support retail sales. Retail sales of goods & services increased 9.0% YoY in April and 8.5% in 4M 2024 (in which retail sales of goods rose 7.1% YoY, retail sales of accommodation & catering services increased 15.3% YoY, and retail sales of tourism services jumped 49.3% YoY). We expect overall retail sales in May could be supported by (1) the ongoing rebound of international arrivals – especially Chinese tourists, and (2) high demand from the five-day holiday at the beginning of May (Vietnamese Reunification Day, and International Labor Day).

- Budget revenue maintained solid growth. According to the MoF, total State revenue and expenditures amounted to VND733.4tn (USD28.9bn; +10.1% YoY) and VND522.2tn (USD20.6bn; +4.4% YoY), completing 43.1% and 24.6% of the annual plan, respectively. As a result, the State budget posted a fiscal surplus of VND211.2tn (USD8.3bn) in 4M 2024 (vs a surplus of VND145.1tn or USD5.7bn in 4M 2023). In terms of budget expenditures, State spending for investment & development only rose 4.8% YoY to VND115.9tn (USD4.6bn), completing 17.1% of the annual plan. However, we expect the Government will continue to boost fiscal spending to spur economic growth in coming months.

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