Consumer confidence strengthens further in july

The ANZ-Roy Morgan Vietnam Consumer Confidence Index, posted consumer confidence in Vietnam in July increased to 134.1 points, from 131 points in June. This level stands well above the average of 131 points in the year to date.

The ANZ-Roy Morgan Vietnam Consumer Confidence Index was conducted in July by ANZ Vietnam and Roy Morgan through the face-to-face interview with 1,000 Vietnamese people national wide. This is the second time this monthly index was released as a gauge sentiment in Vietnam’s fast-growing consumer sector.

The increase of consumer confidence reflects the steady recovery of the economy, with low inflation rate, strong export growth and rebound of industrial production. The General Statistics Office last week reported that total retail turnover in the year to date increased 11.4 per cent year-on-year, the export turnover grew 14.1 per cent and industrial production grew 6.2 per cent. The increases are much better than the same period in 2013.

“Consumer confidence in Vietnam appears to be re-aligning with a steadily improving macroeconomic backdrop after a short-term rupture associated with a territorial ocean dispute with China,” said Glenn Maguire, chief economist of ANZ in Asia-Pacific.

Though confidence is realigning with an improving economic backdrop, Maguire believed the economic backdrop would be one of a sure-and-steady recovery, rather than a V-shaped rebound.

“Confidence sitting above the 2014 average is aligned with Vietnam’s ongoing economic momentum. However, further strong gains in confidence will need to be propelled either via wealth effects from higher equity and gold prices, or a faster improvement in the economic backdrop. Hence, we would now assess confidence as being more likely to move sideways at elevated levels rather than continue to make strong gains,” she said.

According to the survey of ANZ Vietnam and Roy Morgan, more than one third of Vietnamese consumer, 34 per cent, said their family is ‘better off’ financially than a year ago compared to 19 per cent who said their family is ‘worse off’ financially.

Meanwhile, more than half of Vietnamese consumers, 55 per cent, expect their family will be ‘better off’ financially this time next year. Only six per cent who expect to be ‘worse off’.

Slightly more than a third of Vietnamese, 37 per cent, said now is a good time to buy major household items compared to 17 per cent who said now is a bad time to buy major household items.