The Index of Industrial Production (IIP) in August 2024 increased by 2.04% MoM and 9.54% YoY. In 8M24, the IIP rose by 8.6% YoY. With the PMI holding above 50 and robust purchasing, we expect the manufacturing and export sectors to maintain their upward trajectory in the last months of the year;

The total retail sales of goods and consumer services in August 2024 reached an estimated VND526.58 trillion, up 7.89% YoY, the least growth year-to-date. Retail sales in major cities such as Hanoi, Ho Chi Minh City, Hai Phong, and Da Nang have grown at a modest pace, only around 6-7% YoY. Following the devastation caused by Typhoon Yagi in early September, retail sales of goods could rebound in the next month. However, it may take longer for consumer sentiment to recover fully and for growth to surpass the 10% levels seen before the pandemic;

Public investment from the state budget in 8M24 reached VND363,097 bn, up 3.25% YoY, fulfilling 53.61% of the annual plan. In the immediate aftermath of Typhoon Yagi, government spending is expected to increase as disaster relief and recovery efforts are accelerated in the coming months. The state budget has generated a significant surplus of over VND200 trillion in the first eight months, providing ample fiscal flexibility. We commend the successful overachievement of the initial disbursement target, as the remaining disbursement volume in the last 4 months of this year is lower compared to the actual disbursement amount of the last 2 years;

The CPI increased 3.45% YoY in August. While inflationary pressures on items like gasoline and education are expected to ease in the coming months, the disruptions caused by natural disasters to the supply chains of grain food, foodstuffs, construction materials, and other goods will likely drive up their prices. The CPI is likely to increase higher in the coming months, compared to August, and is forecast to return to around 3.5-4%;

As of September 9, 2024, the VND has only depreciated by 1.49% against the USD. The VND is expected to continue its stable trajectory through year-end, buoyed by (1) the Fed’s anticipated rate reductions and (2) a strong influx of foreign currency from trade surpluses, international tourists, and remittances.