Consumer confidence posts large fall in August
Consumer confidence posts large fall in August
The ANZ-Roy Morgan Vietnam Consumer Confidence Index slid 4.9 points to 133.7 in August over July, caused by weaker sentiment across all components in a monthly survey.
This month's figure was 1.8 points lower than the level recorded a year ago, according to a report published by ANZ Bank today.
Thirty-one per cent (down 3 percentage points) of Vietnamese respondents said their families are "better off" financially than at the same time last year – the lowest recorded for the indicator since last November. Twenty-two per cent (up 1 percentage point) claimed they were "worse off".
Fifty-eight per cent (down 5 percentage points) said they expected their families to be "better off" financially this time next year, while six per cent (up 1 percentage point) predicted "worse off".
Forty-six per cent (down 4 percentage points) expected Viet Nam to have "good times" financially during the next 12 months, the lowest value ever recorded, while 12 per cent (down 1 percentage point) expected the country to have "bad times".
Fifty-five per cent (down 9 percentage points) of respondents expected the country to have "good times" economically over the next five years – the lowest recorded since May 2014, compared to seven per cent (unchanged) who expected "bad times".
Forty per cent (unchanged) said "now is a good time to buy" major household items compared to 14 per cent (up 2 percentage points) who thought otherwise.
"Viet Nam finds itself in remarkable stead, having bucked the regional slump into trade recession, and is the only economy in Asia to post positive export and import growth," said Glenn Maguire, ANZ chief economist in South Asia, ASEAN and the Pacific.
"This is an environment where consumer confidence – certainly pride – should be flourishing. Instead, consumer confidence fell sharply in August," he said.
"From an economic perspective, we can see triggers for a decline, but not a justification for the magnitude of the decline," he added.
Maguire specified that during August, Vietnamese policymakers had resorted to unexpected policy action such as widening the exchange rate band and moving in for a third devaluation. The surprise devaluation of the Chinese yuan earlier this month may have also triggered concerns about loss of Vietnamese competitiveness.
"In our view, the declines in the 12-month and five-year outlook suggest that Vietnamese households may have interpreted prudent policy action by the authorities as signs of weakness," he said.
Maguire noted that the dong devaluations this year are aimed at ensuring that an outperforming economy does not see its trade competitiveness wane due to a misaligned exchange rate.
The fact that domestic gold prices have remained low suggested that the fall in confidence did not drive people to seek shelter at one of Viet Nam's favourite safe havens," he added.
"With the Vietnamese economy remaining sure and steady, we note that households are very sensitive to economic news, but expect confidence to stabilise eventually, in line with a resilient economy," Maguire said.
