The Index of Industrial Production (IIP) increased by 2.2% MoM and 0.01% YoY. In general, in 5M2023, the IIP decreased by 2% over the same period, signifying the challenging situation the manufacturing industry is in;

Total retail sales of goods and services in May reached VND 519.02 trillion, up by 11.54% YoY and 1.47% MoM. We expect revenue from the tourism segment to continue to maintain strong growth, while retail sales of goods will benefit in the second half of the year after the implementation of the 2% VAT reduction package;

Investment disbursement from the state budget in May reached VND 45,139 billion, up by 18.22% YoY and 12.72% MoM. Thus, accumulated in 5M2023, the disbursement of state budget totaled VND 177,040 billion, up by 19.72% YoY and completing 25.5% of the 2023 plan. The disbursement rate up to now remains much lower than the same period of previous years. We assess that it will take a lot of effort to complete the 2023 plan;

CPI climbed 2.43% YoY in May, the lowest since March 2022. However, inflationary pressure is likely to return in the coming months due to season-based rising demand for electricity, and water and the increase in electricity prices from the beginning of May will be reflected in the spending of households starting from June, while the pork price has also increased again. However, with abundant available space (3.55% increase in 5M2023) and the gasoline prices - input for many types of goods is increasingly dipping, we reiterate the view that CPI has peaked and maintain our full-year forecast at around 4%;

By May 5th, the VND has appreciated by 0.60% against the USD. The Fed’s upcoming decisions on interest rates will be a notable factor to monitor, as they can apply short-term pressure on the exchange rate. However, in general, we think that the VND will have more stable movements this year, fluctuating within ±2%, thanks to the trade surplus and the sustained growth of remittances.