Consumer confidence advances in September 2015, reports ANZ-Roy Morgan Vietnam Consumer Confidence in a report dated 23 September 2015.

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HIGHLIGHTS

The ANZ-Roy Morgan Vietnam Consumer Confidence index rose 1.6pts to 135.3pts in September, and is 0.3pts higher than a year ago (Sept ’14: 135.0). The small gain in September was driven by increased optimism about the country’s overall economic prospects in the next year and over the next five years.

  • In terms of personal finances, 29% (down 2ppts from August) of Vietnamese respondents said their families are ‘better off’ financially than the same period last year, the lowest value recorded for the indicator since November 2014. In contrast, 22% (unchanged) said their families are ‘worse off’ financially.
  • 55% (down 3ppts from August) of respondents expect their families to be ‘better off’ financially this time next year, the lowest level recorded for the indicator since January 2015. However, only 6% (unchanged) expect their families to be ‘worse off’ financially.
  • In addition, 50% (up 4ppts from August) of respondents expect Vietnam to have ‘good times’ financially during the next 12 months, in contrast to a 12% (unchanged) who expect ‘bad times’ financially.
  • Over the next five years, 61% (up 6ppts from August) of respondents expect the country to have ‘good times’ economically compared to only 7% (unchanged) who expect Vietnam to have ‘bad times’ economically.
  • Finally, 41% (up 1ppt from August) of respondents said ‘now is a good time to buy’ major household items compared to 12% (down 2ppts) who said ‘now is a bad time to buy’ major household items.

ANZ CHIEF ECONOMIST SOUTH ASIA, ASEAN & PACIFIC, GLENN MAGUIRE SAID:

“Vietnam continues to find itself in the remarkable stead of being the only Asian economy not recording negative import and export growth. It is strongly bucking the regional trade recession. However, dynamics within the Vietnamese economy will clearly not be immune to a weaker global trade environment and the September confidence survey may contain the first hints of caution among local consumers.

There is a very clear split between short term personal financial sentiment and the medium to longer term outlook for the economy.

It is notable that fewer households currently feel better off, compared to a year ago, and expect to be better off in one year from now. However, at the same time that confidence in the personal financial assessment has been waning, confidence in the nation’s medium to longer term economic outlook has picked up rather strongly.

The short term assessment on personal finances may have been eroded by policy decisions to weaken the Dong and widen its trading band in August, measures which will make imports more expensive for the average Vietnamese household.  However, over the medium term this is a prudent policy choice that will retain Vietnam’s export competitiveness and ensure continued insulation from the regional trade recession.

We think a sharp erosion in confidence in Vietnam is highly unlikely. Our expectation of resilience stems from Vietnamese trade performance in the coming months, thanks to strong FDI inflows in recent years.”

For further details – ANZ-Roy Morgan Vietnam Consumer Confidence Sept 2015.

Regards,

Glenn Maguire | Chief Economist, South Asia, ASEAN & Pacific

Eugenia F. Victorino | Economist, ASEAN & Pacific

 

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