1.World economy

The news last week showed that the world economy was facing many difficulties when the growth rate of the Chinese economy slowed down, inflation in the US increased again and the German economy officially entered a technical recession.

- In China: Manufacturing activity in May 2023 fell for the second consecutive month China's economy is losing its recovery momentum. The official Manufacturing Purchasing Managers' Index (PMI) - a key measure of factory output - fell to 48.8, according to China's National Bureau of Statistics (NBS). in May 2023, continued to stay below the 50 point mark - the dividing point between growth and contraction and decrease compared to 49.2 in April 2023. In addition, the profits of industrial enterprises in China fell sharply in the first four months of 2023. Companies continue to struggle with pressures of excess profit in the context of weak demand due to the economy. The economy did not recover as strongly as expected. Accordingly, in the first 4 months of 2023, industrial profits decreased by 20.6% compared to the same period last year. In April alone, the decrease was 18.2% after a decrease of 19.2% in March. The Chinese economy still faces many pressures such as difficulties in the real estate sector, consumer confidence. weakness and recession risk in other economies.

In the US: According to the Beige Book report released by the US Federal Reserve on May 31, 2023, the US economy has shown signs of cooling down in recent weeks as job growth and inflation both slow down. again. Accordingly, employment increased in most US counties, but at a slower rate than previously reported. In general, the US job market in May 2023 remained strong, after the US Department of Labor's JOLTS Report showed that job opportunities in April 2023 continued to increase to the highest level within 3 months, reaching 10 ,2 million jobs, an increase of 358 thousand compared to the previous month.

Meanwhile, the FED survey also showed that inflation in May 2023 slowed down after increasing in April 2023. According to the US Department of Commerce, the price index of personal consumption expenditures (PCE) of this country in April 2023 increased by 4.4% over the same period last year and up from 4.2% a month earlier. This is the first time since January 2023 annual US PCE increased, mainly due to increases in prices of services, food and goods. Meanwhile, core inflation (excluding food and energy prices) in April also increased to 4.7%. High inflation and the end of COVID-19 benefits are putting pressure on the budgets of low- and middle-income households. High inflation, public debt ceiling negotiations have had an impact on US consumer psychology. Accordingly, the Conference Board's Consumer Confidence Index fell to 102.3 in May 2023 from 103.7 in April (revised from 101.3).

In Europe: The European economy faced many difficulties when the largest economy in the region, Germany, officially fell into recession, the inflation rate of many economies in May 2023 decreased but remained at high level. Accordingly, Germany has officially entered a technical recession with statistics showing that Europe's largest economy shrank 0.3% in the first quarter of 2023. The German economy entered a recession in the first quarter of 2023. context of high inflation and high interest rates across the region.

In May 2023, inflation rates in Germany, Italy, and France continued to decrease. According to preliminary calculations of the German Federal Statistical Office (Destatis), the inflation rate in this country continued to decline in May 2023 when consumer prices increased by 6.1% over the same month last year; in Italy, the country's inflation in May 2023 also decreased from 8.2% in April 2023 to 7.6% in May 2023; French inflation in May 2023 also cooled to the lowest level in a year, at 6.0%, after reaching 6.9% in April 2023.

However, this inflation is too high compared to the 2% inflation target and the European Central Bank is expected to raise interest rates again at its next meeting on June 15, 2023. The bank has raised interest rates by 375 basis points since July 2022. In general, inflation and interest rates continue to be high, the leading economy in the region falling into recession are challenges for the euro area economy in the remaining months of 2023.

2. Vietnam economy

In May 2023, the domestic economy showed signs of improvement when data from the General Statistics Office showed that manufacturing activities showed signs of improvement, total domestic retail sales continued to increase, while export activities continued to increase. , imports improved. Specifically:

- Industrial production: In May 2023, industrial production showed signs of improvement compared to April 2023 when estimated to increase by 2.2% over the previous month and by 0.1% over the same period last year. before. However, due to the difficult situation of the world economy in the first months of 2023, the decrease in export orders affected domestic industrial production. the whole industry decreased by 2% over the same period last year.

- Total retail sales of consumer goods and services: Total retail sales of consumer goods and services in May 2023 was estimated at VND 519 trillion, up 1.5% over the previous month and increased by 11.5% over the same period last year due to a series of public holidays in the month, so the demand for consumption, eating and entertainment of people increased higher than the previous month. In the first 5 months of 2023, the total retail sales of consumer goods and services was estimated at 2,527.1 trillion VND, up 12.6% over the same period last year (up 9.3 in the same period in 2022. %).

- Import and export activities: In May 2023, the import and export turnover of goods in May 2023 increased compared to April 2023 thanks to strongly promoted trade promotion activities. According to estimates, the total export and import turnover of goods in May 2025 reached 55.86 billion USD, up 5.3% over the previous month, but still down 12.3% over the same period last year. However, the export and import turnover of goods both decreased significantly. Accordingly, the export turnover of goods in May 2023 was estimated at 29.05 billion USD, up 4.3% compared to the previous month, down only 5.9% over the same period in 2022 compared to a decrease of 16. 2% over the same period of April 2023; import turnover of goods in May 2023 was estimated at US$ 26.81 billion, up 6.4% over the previous month, down 18.4% over the same period in 2022, improved compared to a decrease of 23.1% compared to the same period in April 2023. In general, in the first 5 months of 2023, the total import and export turnover of goods was estimated at USD 262.54 billion, down 14.7% over the same period last year, of which exports decreased by 11.6%; imports decreased by 17.9%. The trade balance of goods in the first 5 months of 2023 is estimated to have a trade surplus of US$9.8 billion.

-The consumer price index increased slightly: The increase in food and food prices, the increase in electricity and domestic water prices due to prolonged hot weather were the main reasons for the increase in the consumer price index (CPI) in May 2023. 0.01% compared to the previous month; Compared to December 2022, CPI in May 2023 increased by 0.4% and over the same period last year by 2.43%. On average, in the first 5 months of 2023, CPI increased by 3.55% over the same period last year; core inflation increased by 4.83%. Core inflation in May 2023 increased by 0.27% over the previous month, by 4.54% over the same period last year. On average, in the first 5 months of 2023, core inflation increased by 4.83% over the same period in 2022, higher than the overall average CPI (up 3.55%). The average domestic gasoline price in the first 5 months of 2023 decreased by 15.27% compared to the same period last year, the decrease in gas price by 8.51% is a factor restraining the growth rate of CPI, but belongs to the group of goods excluded in this period. core inflation portfolio.

Source: Office of Vietnam Timber and Forest Products Association