In the face of high inflation and the risk of an energy crisis threatening most of the global economy, in 2022 Vietnam’s macro-economy will be quite stable, somewhat impressive with GDP growth rate.
But the question is why is the macroeconomics good but the financial market is struggling, while the operation of the financial market is to support macroeconomic stability?
Why is the macroeconomics stable in 2022?
Not only is it stable, but the GDP growth rate is quite impressive, estimated at about 8%, bringing the GDP scale to a new milestone of 397.44 billion USD in 2022 (World Bank – WB expects 394.5 billion USD in 2020). ). Although optimistic, first of all, it is necessary to understand, achieving such a GDP growth rate is partly due to the low comparative background, in 2021 our country’s GDP growth will only reach 2.58%, the GDP scale will reach 368 billion USD.
Transactions at SHB Hanoi Branch. Photo: Pham Hung
If we look at each component of GDP, it shows that, first of all, import and export turnover increased sharply. Import and export value as of December 15 reached 721.28 billion USD. In which, export reached 355.82 billion USD, import reached 345.46 billion USD, trade surplus reached 10.35 billion USD. Compared with the absolute increase of GDP in 2022 of 29.44 billion USD, the import-export surplus contributed 35.15% to GDP growth, and 64.85% due to the contribution of the remaining components.
Second, individual and government final consumption both increase. Right from the beginning of the first quarter of 2022 when the Covid-19 epidemic was basically extinguished, people’s consumption demand recovered quickly.
While many economic recovery support packages have been approved by the National Assembly and implemented by the Government. There is currently no report on actual disbursement figures of this recovery program, but it is clear that the support packages contribute significantly to GDP growth in 2022.
According to estimated data, the final consumption of individuals and the government contributes to GDP growth about 42-43%; The investment component that accumulates assets contributes to the GDP growth in 2022 about the remaining 21-22%. The limitation in the field of investment is that enterprises have difficulty in mobilizing medium and long-term investment capital. Especially in the field of real estate (real estate), thousands of investment projects are unfinished due to legal regulations.
Third, monetary policy has not created a shock. The State Bank of Vietnam (SBV) has not yet made a strong move to raise interest rates to tighten monetary policy.
Although in 2022, the State Bank has adjusted to increase the operating interest rate twice, but it did not create a significant shock to the economy. The SBV’s request for banks to tighten credit in high-risk areas such as real estate and securities in general does not affect economic growth.
Besides the positive economic growth, the inflation target of 4% is still under control. The most worrisome for our country is cost-push inflation. But despite the high price of energy and raw materials in the world market, Vietnam can limit “inflationary imports”.
An “open” economy with a width like Vietnam’s to avoid imported inflation in 2022 is fortunate. This also makes it clearer, for example, that US inflation is close to double digits, but Vietnam has a large trade surplus with the US, so the benefits outweigh the harms.
While Vietnam has a large trade deficit with China, the country’s 11-month inflation is only 1.6%. Moreover, in terms of key consumer goods such as food, domestic food in general has dominated. Besides, thanks to “anchoring” the prices of some services such as electricity, health care and education, there is room to control inflation more broadly.
Why is the financial market struggling?
Stable macro-economy is the basis for stable and developing financial market. However, this is not appropriate in 2022 in our country. Why is the macro economy stable, economic growth impressive, inflation under control, but the stock market plunges and fluctuates, while the corporate bond market is almost broken, the real estate market is dangerous? enter into a recession.
Needs a cautious but authentic look. First of all, say macroeconomic stability but question whether there is real stability, then there is a problem. The overall macroeconomic picture is trying to obscure the dim spots of the economy, it is waiting for an opportunity to unfold. GDP growth is relying too much on the FDI sector. While the state budget revenue increased sharply mainly from the revenue from selling land and natural resources, it is not sustainable.
Stable macro-economy is the foundation for long-term stock market development. Meanwhile, our country’s stock market is developing in reverse. In fact, stock trading on all 3 exchanges is mainly “surfing”, speculative factors dominate investment, technical analysis is crushing fundamental analysis. Of course, the volatility of our country’s stock market from the beginning of the second quarter to the end of the year has a certain influence on risks on the global stock market. But volatility is much stronger and more unpredictable.
One of the important operational goals of the stock market is to support and create conditions for the equitization of state-owned enterprises, but it cannot be promoted due to various reasons. Along with that, creating an equal and fair playing field for the public to invest and accumulate capital. However, in fact it has turned the playground “putting the chickens into the coop” of the market manipulator group. Therefore, the negatives of the stock market are more and more exposed.
A seemingly insignificant problem, but very dangerous, is that interest groups have thoroughly abused the media to drive the market, cheat to push prices, print stocks to sell for money. It is not uncommon for the owner of a listed company to earn huge profits with two hands, one to borrow money to invest in projects, the other to borrow money to invest in securities. Therefore, the price of a certain A or B stock fell and then hit the ceiling for many consecutive sessions, someone’s hand was not difficult to understand.
Upgrading the stock market to the emerging market group is the development strategy of Vietnam’s stock market. But the news of the upgrade seems to be turning into a conspiracy theory to push up the stock price.
No one can raise more floors when the foundation is weak. The key issue in upgrading the stock market today is to improve the transparency, rigor and discipline of the market, not the emerging market. For the sustainable benefit of the economy, managers, upgrading the stock market is a double-edged sword.
The year 2022 has come to an end. Currently, there is no signal that global inflation has subsided. Central banks will stop tightening monetary policy. In contrast, the global growth forecast in 2023 will be more difficult than in 2022. The domestic situation has signaled since the beginning of the fourth quarter until now. The phenomenon of many businesses having their export orders cut, and unemployed workers are alarming.
In 2023, the macro economy will certainly be more difficult than in 2022. Our country’s stock market has not had a significant positive impact in contributing to macroeconomic stability. The issue that needs attention in the coming year is a more effective combination of fiscal policy and monetary policy.
This is the total force contributing to the stability of the macro-economy in 2023. Fiscal policy and monetary policy cannot “shake” before market pressure by pulling strings of interest groups.
The main driver for growth is fiscal policy, not much on monetary policy. A sharp increase in disbursement of public investment is a decisive factor for growth in 2023. Lack of money, lack of capital for business activities is only partial, is the market sentiment fueled by the media. The story of expanding credit room in 2022 to 15.5 – 16% by the State Bank under market pressure has become unnecessary when in fact, credit growth only reached 12.87% on December 21.
According to Dr. Phan Van Thuong – Hong Bang International University
