Production expanded at slower pace. The overall index of industrial production (IIP) rose 6.3% YoY in October — with IIP of the manufacturing sub-sector growing 5.7% YoY — which was the lowest monthly YoY growth since February 2022. In 10M 2022, overall IIP increased 9.0% with IIP of manufacturing rising 9.6%. According to S&P Global, the Vietnam Manufacturing Purchasing Managers' (PMI) Index fell to a 13-month low of 50.6 in October from 52.5 in September due to weaker increases in new orders, output, employment and purchasing activity.  

Retail sales continued to deliver double-digit growth. Retail sales of goods & services surged 17.1% YoY in October, bringing total retail sales growth in 10M 2022 to 20.2% YoY in nominal terms and 16.1% YoY in real terms vs respective declines of 5.1% and 6.8% in 10M 2021. We expect domestic consumption to remain solid at year-end as it should be supported by a lower unemployment rate and higher income compared to last year, in addition to a further robust recovery of the tourism sector. However, a potential lower rate of job creation due to a slowdown of production expansion and a higher base as retail sales started to recover in Q4 2021 could decelerate retail sales growth.

State budget completed the 2022 revenue plan in 10M 2022. According to the General Statistic Office of Vietnam’s (GSO) data, total State revenue climbed 16.7% YoY to VND1,464.3tn (USD59.0bn) in 10M 2022, which was 3.7% above the annual plan. Meanwhile, budget expenditures rose only 6.3% YoY to VND1,219.2tn (USD49.2bn) — or 68.3% of the full-year target — leading a fiscal surplus of VND245.1tn (USD9.9bn) in 10M 2022 vs only VND74.9bn (USD3.2bn) in 10M 2021. The positive performance of State budget revenue could support the implementation of fiscal measures to support Vietnam’s economy and help to offset the likely negative impact from a global slowdown on exports.

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