How the Current World Finance Impacts Vietnam?
Table of Contents
Following the US inflation data published over the weekend
The consumer price index (CPI) rose 8.6%, higher than April and also the highest since 1981.
The main reasons are:
- Prices of fuel and oil have increased by nearly 50% in the past year
- Food prices increased for the first time at 2 digits of 10.1%, since 1981
- The housing index and rental costs have also increased by 5.5% since 1991
This leads to concerns that inflation in the US has not shown signs of peaking in the near future.
Making the pressure on the US Federal Reserve (FED) even greater: If interest rate increases quickly and strongly, the US economy could be pushed into recession, affecting the global economy.
At the same time, the main cause of fuel price volatility from the conflict between Ukraine and Russia has not shown signs of cooling down.
Besides, the Covid-19 situation in China also created a certain tension for investors around the world.
Results This Week: Global Finance Blaze With Inflation Fear
A series of investment channels fluctuated strongly:
- Asian and European stocks, bonds and digital currencies are all being sold off
- Yesterday, the world gold price lost more than $ 50 an ounce, while the S&P 500 index dropped by nearly 4%
Yesterday’s world gold price
- Bitcoin price this morning fell more than 18% in just 24 hours, with a bottom of $ 21,000 per coin, when many exchanges stopped working
Bitcoin price since the beginning of 2022
“There are no haven trades. Gold is selling off. The market is making a huge correction. When volatility goes this high, you don’t see any safe place,” said Phillip Streible, market strategist at Blue Line Futures.
How these affect Vietnam?
When the world financial market is unstable, the world economy recovers from the pandemic slower than forecast.
Ukraine – Russia conflict affects fuel supply chains, leading to inflation in Europe, America and Asia…
At the same time, Covid-19 in China remains uncontrollable.
All of the above objective reasons create a rather dark overall picture for investors in Vietnam:
- The price of SJC gold decreased by more than one million dong per tael
Domestic jewelry companies this morning adjusted the price of gold bars down 800,000 to 1.1 million, to less than 68 million, similar to the plunge of the world market.
- Gasoline increased to hit a new record
From the afternoon of June 13, each liter of gasoline has increased to a new record, exceeding VND 32,000.
Fluctuation of gasoline prices in Vietnam
- VN-Index fell more than 57 points
Stocks closed the first session of the week in the overwhelming red, the HoSE recorded nearly 460 down points, of which more than 160 stocks dropped to the floor price, causing the VN-Index to lose more than 4.4%.
Stocks overwhelmed with the red at the beginning of the week
However, looking at the reports of the Government, some socio-economic indicators were higher than the ones reported such as:
- State budget revenue increased 16.8% of the estimate
- Trade deficit reached 4 billion USD (compared with the reported deficit of the National Assembly of 2 billion USD)
According to the Ministry of Finance, over the same period, the average CPI in the first 5 months of 2022 increased by 2.25%; Core inflation in the first 5 months of 2022 increased by 1.1% compared to the beginning of the year.
CPI increased mainly due to gasoline prices.
Solutions?
- Deputy Prime Minister Le Minh Khai asked to operate and use a flexible petroleum price stabilization fund; have scenarios to ensure the supply and provision of import plans when necessary; to control and strictly handle cross-border petrol and oil smuggling and take advantage of hoarding goods and increase prices
- The Ministry of Finance is expected to propose and submit to the National Assembly Standing Committee in its competence to further reduce environmental protection tax on gasoline and oil
In general, the socio-economic situation in Vietnam is less volatile than the world
If there is an impact, it’s probably psychological influence: investors are afraid and cautious, carefully observing the changes in the world financial situation during this time.
In addition, a straightforward view points out a number of factors such as the shortage of human resources and the disbursement of public investment capital is not as fast as expected has partly affected the equitable development of the economy.
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