Vietnam consumer confidence highest since March: ANZ

30-Aug-2014 Intellasia | DVO/SBV | 6:00 AM Print This Post

ANZ Bank says the Vietnam consumer confidence index (CCI) reaches 135.5 points in August, up 1.4 points from the previous month, higher than the average of 131.6 since the beginning of the year and the highest since March.

The CCI increase in this month is mainly because consumers believe that Vietnam’s economy will grow in the coming years. This indicates a shift from the political concerns to the macroeconomic situation improvement.

Regarding personal finance, 32 percent Vietnam consumers say their family’s financial situation is “better” than the previous year, and 21 percent of them say that it is “worse”.

Regarding future prospect, 56 percent of Vietnam consumers expect that their family’s financial situation “will be better” next year. This rate rises 1 percent and is the highest rate since early 2014. Meanwhile, only 5 percent of consumers (down 1 percent) think that their family’s financial situation will be worse, the lowest rate since early 2014.

Regarding the Vietnam’s economy, 51 percent (up 4 percent) of consumers expect that Vietnam will be “in a good state” financially within the next 12 months. Meanwhile, only 15 percent of consumers participating in the survey, suppose that there will be “bad states”. This ratio remains unchanged from the previous month.

Approximately 60 percent of Vietnam consumers expect that the general economic situation will be in a “good condition” in the next five years, only 5 percent (down 2 percent) of them think that it will be in a “bad state”. 40 percent of the consumers say that this is “a good time” to buy major household items (such as electronics, furniture, etc.), and only 16 percent (down 1 percent) of them comment this is not an appropriate time to buy these items.

Glenn Maguire, ANZ’s Chief Economist, Asia Pacific said “That Vietnam consumer confidence index continues to rise is in line with the steady improvement in the macro economy, and this is the third consecutive increase since the tense situation occurred between Vietnam and China in April – May period, in which the confidence in the economy fell sharply”.

According to Maguire, the basic data of CCI confirm the shift from the midterm political concerns to short-term macroeconomic improvement policies. This is the main reason behind the increase in the stability of the consumer confidence. Political tension is often reflected in the long term – five years, while economic growth tends to be forecasted for shorter periods – 12 months for personal finance and the economy in general.

ANZ continues to believe that Vietnam consumer confidence is more likely to fluctuate around the current level rather than continue to increase sharply. In this regard, ANZ notes that the continuous increase in the consumer confidence has gradually been smaller in the past three months, indicating that the recovery in the consumer confidence from the lowest level of this year has nearly reached the highest level.

A further increase in the consumer confidence will need to be promoted through the asset effects from stocks or higher gold prices or faster growth of the economy. Therefore, ANZ still believes that the CCI is likely to move sideways or gradually increase instead of continuing to hike strongly.

 


Category: Economy, Vietnam

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