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In the first quarter of 2023, a series of administrative regulations such as Decree 08 amending and supplementing Decree 153/2020 regulating the offering and trading of corporate bonds and Resolution No.33 of the Government on a number of solutions to remove and promote the safe and healthy development of the real estate market, shows that the Government is actively trying to remove bottlenecks of the corporate bonds market as well as the real estate market and open a new capital flow in the economy.
The Government also signed a decision to establish five working groups to inspect, urge and remove difficulties and obstacles, and speed up the disbursement of public investment capital in 2023 at ministries, central agencies, and localities.
Accordingly, the State Bank of Vietnam has issued a draft amendment to Circular 16, with new conditions allowing banks to buy newly issued corporate bonds to finance working capital and buy back unlisted corporate bonds to open bottlenecks in some cash flow for real estate companies. At the same time, the State Bank of Vietnam reduced the rediscount rate to 3.5 percent per year and the refinancing rate to 5.5 percent per year, and reduced the ceiling of short-term deposit rates to reduce lending rates.
The latest, preferential credit package of VND120,000 bln for social housing, worker housing, renovation and reconstruction of old apartments has also been officially implemented by four state-owned commercial banks, namely, Agribank, Vietcombank, VietinBank and BIDV.
External developments from the US Federal Reserve Bank (FED), the European Central Bank (ECB), and the Bank of England (BoE) are entering the final stage of interest rate hikes, which has helped the Vietnam stock market to turn green in March. VN Index gained 3.8 percent and closed March at 1,064.6 points, raising expectations that April will continue to maintain its uptrend.
However, the economic growth data in the first quarter of 2023 was actually much lower than expected, as GDP growth was only 3.3 percent. If not considering the time when the economy was negatively impacted by the Covid-19 pandemic, this is the lowest growth rate since the first quarter of 2009. The best growth engines of Vietnam so far, such as the manufacturing and processing industry, saw the first quarter decrease by 0.4 percent over the same period, the real estate was negative by 0.1 percent, the capital construction sector associated with real estate services and public investment did not do much better, increasing only about 2 percent over the same period, lower than the average growth rate of about 5.5 percent in the first quarter of the last five years.
Ho Chi Minh City, which is the locomotive of economic growth of the country, also shows a less positive picture when GRDP growth in the first quarter of 2023 at only 0.7 percent. Consumer retail accounted for more than 18 percent of the GRDP structure of Ho Chi Minh City, increasing by only 3.8 percent.
Obviously, this is a big challenge not only in the first quarter of this year but may also last in the coming quarters, because newly issued policies often do not penetrate into the market immediately, while global consumption demand has not shown any signs of recovery yet. In such a general picture, in order to achieve the set goals, plans, and targets assigned by the National Assembly, the remaining quarters of 2023 need to make great efforts to make up for what the first quarter has not yet achieved.
