As Vietnam continues to thrive among Asia’s top destinations for foreign investment, Kenno remains committed to keeping its global audience informed about key developments through the 'Kenno Vietnam Pulse' series. In August 2024, Vietnam experienced positive economic developments, marked by strong export performance and financial recovery. There were notable advancements in the semiconductor and AI sectors, along with some changes in government personnel.
In August, Vietnam's export sector, one of the three key drivers of economic growth, continued its strong performance in 2024. By mid-August, export value had increased by 16% YoY, reaching $244 billion USD, driven by a resurgence in global demand, particularly from the US and EU, for electronics, computers, wooden furniture, and agricultural products. This robust export activity contributed to a trade surplus of $15.5 billion YTD.
In the financial market, a notable event was the recovery of the Vietnamese dong (VND). After losing approximately 4.4% against the USD from the beginning of 2024 to late June, the VND gained back 2% in July and August. With Vietnam's solid economic fundamentals, including the trade surplus, strong FDI disbursement, and healthy remittance inflows, there is potential for the State Bank of Vietnam (SBV) to accumulate foreign exchange reserves later this year, particularly if the USD outlook remains soft.
This initiative is part of Vietnam’s broader strategy to position itself as a global semiconductor hub by investing in high-tech industries, which is vital for driving economic growth and enhancing the country’s competitiveness on the international stage.
Additionally, the government has outlined plans to develop human resources in this critical sector, including a project aimed at training 50,000 engineers by 2030, further underscoring its determination to establish Vietnam as a key player in the global semiconductor market.
However, challenges remain, particularly in the areas of AI education and training, which are crucial to enhancing the country's competitiveness. To address these challenges, the Vietnamese government, in collaboration with major technology companies like Google, is making concerted efforts to build a robust AI ecosystem.
Initiatives such as Google's pledge to provide 40,000 scholarships and its commitment to training 200 Vietnamese startups in AI-related fields are key to developing a high-quality workforce and fostering innovation in the AI sector. As Vietnam continues to invest in AI, the country's startup ecosystem is gaining momentum, attracting significant investment and positioning Vietnam as a competitive player in the global AI landscape.
Nguyen Hoa Binh, previously Chief Justice of the Supreme People's Court, Ho Duc Phoc, the Minister of Finance, and Bui Thanh Son, the Minister of Foreign Affairs, bring a wealth of experience from their respective fields. The new appointments expand the government leadership to include Prime Minister Pham Minh Chinh and five Deputy Prime Ministers, reinforcing Vietnam's governance structure during this pivotal period.
These appointments are expected to support Vietnam's ongoing economic and political developments and are seen as a strategic alignment to reinforce the country’s leadership as it navigates an increasingly complex global landscape.
And that’s a wrap for this month’s edition of Kenno Vietnam Pulse. We hope you enjoyed reading and found valuable insights into Vietnam’s market landscape. Feel free to subscribe to our monthly newsletter more timely, factual, and actionable updates.
Should you need a closer look at investment opportunities in Vietnam, we invite you connect with us for more information and tailored advice.
Laura Ranin
Disclaimer:
This document is prepared by Kenno Asset Management Pte. Ltd. ("Kenno"), the investment advisor for the Asia Top Picks Fund which is open only to professional investors. This marketing communication does not constitute investment advice. Please refer to Kenno’s official fund documents before making any final investment decision.
The information provided in this document is accurate as of the time of writing. Kenno does not guarantee the ongoing accuracy or completeness of this information and is not responsible for updates or changes after publication.