ANZ survey reveals rising consumer confidence

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A joint ANZ Vietnam-Roy Morgan survey released last week reported Vietnam’s consumer confidence index had risen sharply to 142.3 up from 135.4 points in February, ending a slight drop in December and January.

“The Year of the Goat could well be an auspicious one for household consumption in Vietnam. The Lunar New Year has been ushered in with Vietnamese households displaying a record level of optimism in the three key components of our consumer confidence index,” Glenn Maguire, chief economist of ANZ in South Asia, ASEAN and Pacific, said.

In terms of personal finances 38 per cent of Vietnamese said their families are financially ‘better off’ than a year ago, up five per cent compared to 21 per cent who said their families are ‘worse off’.

Nearly 60 per cent of Vietnamese expect their families will be ‘better off’ financially this time next year compared to just seven per cent who expect to be worse off. In addition, half of Vietnamese said now was a good time to buy major household items compared to 10 per cent who said now is a bad time.

Looking further ahead, 66 per cent expect Vietnam will have good times economically over the next five years, up nine per cent compared to eight per cent who expect bad times.

“The details of the consumer confidence survey provide us with some optimism that the dichotomy between external and domestic demand could well start to narrow over the course of 2015,” said Maguire.

The rebound in the consumer index is a good sign for the continuous recovery of the economy, particularly when the consumer price index in February dropped a marginal 0.05 per cent in comparison with December 2014.

“Although we forecast the Vietnamese economy to experience sure and steady growth recovery over 2015-16, the underperformance of the domestic sector may have made the extent of the recovery in external demand less apparent to ordinary households,” Maguire said.

He added that with a more evenly distributed growth recovery aided by 50 basic points of rate cuts and several discrete dong revaluations over the year, Vietnamese consumer confidence was likely to remain skewed towards the optimistic in the year ahead. This would bode well for a gradual strengthening in household consumption.