Exports improve in November

November exports rose 6.7% year-on-year with shipments of computers and parts surging 20.2% while those of machines went up 5%, it said in a recent report.

"New areas with export growth potential, such as agricultural products, also continued to show signs of strength in support of a modest improvement towards year-end."

The relaxation of visa policy since August has driven a sustained recovery in international tourists, with November welcoming over a million tourists for the fifth consecutive month.

With 11.2 million arrivals year-to-date, the official target of 12-13 million tourist arrivals for 2023 looks to be comfortably secured, HSBC said.

But competition is set to intensify in ASEAN as Thailand has provided visa exemptions for Chinese and Indian tourists and Malaysia has followed suit.

Inflation remains in check, at 3.4% last month, thanks to falling pork prices domestically and declining oil prices globally.

HSBC, however, said it "remained cautious" of Vietnam’s trade prospects in upcoming months as demand for goods in major trading partners were still challenging.

The Manufacturing Purchasing Managers’ Index contracted further to 47.3 last month, with both output and new orders in contraction. A PMI of less than 50 indicates a decline in activities.

There are also risks of rising inflation as Vietnam Electricity, the state-owned utility company, raised its power prices by 4.5% in November to accommodate diminished hydropower production.

Another risk is medical costs, which last month rose for the first time in four years.