ANZ-Roy Morgan Vietnam Consumer Confidence is down 4.5pts to 138.6pts in July. However, Vietnamese consumer confidence remains above its 2014 average of 133.3 and is now 4.5pts higher than a year ago in July 2014 (134.1).
- The fall in July was mainly due to reduced confidence about the Vietnamese economy over the next 12 months and the next five years, and fewer respondents who believe ‘now is a good time’ to buy major household items.
- In terms of personal finances, 34% (down 2ppts) of respondents said their families are now ‘better off’ financially than at the same time last year – the lowest recorded for this indicator since January 2015. On the other hand, 21% (down 1ppt) of respondents felt their families are ‘worse off’ financially.
- 63% (up 2ppts) of respondents expect their families to be ‘better off’ financially this time next year, making it the highest ever recorded for the indicator. At the same time, only 5% (unchanged) expect themselves to be ‘worse off’ financially.
- In addition, 50% (down 8ppts) of respondents expect Vietnam to have ‘good times’ financially in the next 12 months (the lowest recorded for this indicator since January 2015). Meanwhile, 13% (up 3ppts) expect ‘bad times’ financially.
- Over the longer term, 64% (down 2ppts) of Vietnamese expect Vietnam to have ‘good times’ economically over the next five years, while 7% (up 3ppts) expect ‘bad times’ economically.
- Finally, 40% (down 7ppts) of Vietnamese believed ‘now is a good time to buy’ major household items (the lowest recorded for the indicator since December 2014) in contrast to 12% (unchanged) who said ‘now is a bad time to buy’ major household items.
ANZ Chief Economist South Asia, ASEAN & Pacific, Glenn Maguire said:
“ANZ-Roy Morgan Vietnamese Consumer Confidence has come off its mid-year record high and continues to point to an economic recovery that is broadening and strengthening.
“Dichotomies in the Vietnamese economy appear to be changing. The earlier stage of the recovery was characterised by an outperforming external sector and an underperforming domestic and household sector. Our consumer confidence index has clearly shown that dichotomy is starting to yield to a more even and balanced economic performance.
“Now, however, a new dichotomy appears to be emerging. A very firm 63% of households (up 2ppts) expect their families to be better off this time next year – a record high for this indicator. The assessment of personal financial situations generally bucks the trend of declining optimism on both the short and long term economic outlook.
“An important consideration here is probably the widespread coverage of firm minimum wage increases proposed for 2016. The Vietnam General Confederation of Labour (VGLC) has proposed a 16-17% increase in wages for 2016.
“If endorsed by the National Salary Council, the firm increase in the minimum wage will go a long way towards bolstering domestic demand and private consumption in what could be a more uncertain global backdrop. We continue to remain optimistic on the strength and durability of the Vietnamese economic recovery, particularly the consumer components, as we look into 2016.”