Vietnam signals stronger investment led growth in July

Vietnam's economy showed strong growth momentum in July, with production data reaching some of its highest levels in recent years. The Index of Industrial Production (IIP) rose 14.5% year-on-year, marking the strongest seven-month run in years, driven by metals, motor vehicles, and electronics. The Purchasing Managers' Index climbed to a five-month high of 52.9, while manufacturing employment increased 3.3% year-on-year.

Public investment disbursement rose 25.9% year-on-year, accounting for 39% of the annual plan, with Foreign Direct Investment (FDI) totaling $15.2 billion, the strongest seven-month total in five years. Imports grew 34.8% year-on-year, outpacing exports by 21.7%, leading to a $20.5 billion trade deficit. Domestic capital and foreign investment were simultaneously committed to the production base, particularly in electronics and computer components.

Retail sales grew 13.1% year-on-year, supported by steady retail sales, while inflation fell consecutively for two months. The VN-Index fell 6.3% in USD terms, but recovered quickly, signaling a more positive outlook for the market in the coming months.