MBS: Inflation is predicted to remain low, monetary policy tightening is not yet needed
According to MBS analysts, despite pressures from petrol and raw material prices, Vietnam's inflation in 2022 is predicted to remain low. Therefore, the State Bank does not need to tighten monetary policy yet.
According to the latest data of the General Statistics Office (GSO), CPI in May 2022 increased by 0.38% compared to the previous month; increased by 2.48% compared to December 2021 and increased by 2.86% over the same period last year.
According to GSO, the increase in domestic gasoline prices in line with world prices, in addition to the increase in the price of food, foodstuffs, and the price of essential consumer goods and services in line with the price of input materials, are the main reasons for the increase in CPI in May.
On average, in the first five months of 2022, CPI increased by 2.25% over the same period last year, higher than the increase of 1.29% of the first five months of 2021, but lower than the increase of the first five months of 2017 - 2020; core inflation increased by 1.1%.
In the first quarter, gross domestic product (GDP) is estimated to increase by 5.03% year-on-year. Although lower than the 6-6.5% target set by the National Assembly for the whole of 2022, it is still higher than the growth rate of 4.72% in the first quarter of 2021 and 3.66% in the first quarter of 2020.
In which, the agriculture, forestry and fishery sector increased by 2.45%, accounting for 5.76% of the general increase; industry and construction increased by 6.38%, accounting for 51.08%; the service sector increased by 4.58%, accounting for 43.16%.
Foreign direct investment capital realized in Vietnam in the first four months of 2022 is estimated at USD 5.92 billion, the highest value in the first four months of the year in the 2018-2022 period, creating an important driving force for economic growth in 2022.
The Asian Development Bank (ADB) forecasts that Vietnam's economic growth will recover to 6.5% in 2022 and reach 6.7% in 2023. The World Bank (WB) forecasts that Vietnam's GDP growth will reach 5.3% in 2022, then stabilize around 6.5% in 2023.
The International Monetary Fund (IMF) lowered its forecast for global economic growth in 2022 to 3.6%, but believes that, in Vietnam, the economic recovery process will be strengthened from the implementation of the Socio-Economic Development and Recovery Program. The IMF forecasts that Vietnam's GDP will grow at 6% in 2022 and 7.2% in 2023.
- Inward remittances to Ho Chi Minh City reached USD 3.16 billion
- Prime Minister directs to promote digital transformation in banking industry
- 70% of adults in Vietnam have a bank account
- BVSC: VND has depreciated by 2.2% against USD but is still the best currency in the region
- The State Bank to maintain credit growth target of 14%
- As of June 30, the credit growth of the whole economy reached 9.35%.
- KBSV: Banks Q3 results will be more positive with credit room extension
- VDSC: SBV will not adjust interest rates until inflation exceeds 4%
- SSI: The pressure to increase deposit rates will be at the end of the year
- SSI: lending interest rates are expected to decrease by 0.5 - 1% thanks to the interest rate support package of VND 40,000 billion