Economic expert Đinh Trọng Thịnh

Last year ended with many fluctuations for investment channels due to the COVID-19 pandemic, the geopolitical conflicts, and the US Federal Reserve (FED)'s adjustments of interest rates. This year, those difficulties are forecast to remain. Economic expert Đinh Trọng Thịnh spoke to Vietnam News Agency about prospects of investment channels.

What is your overview of the development of investment channels such as gold, real estate, and securities in 2022?

2022 had a prominent feature that at the beginning of the year all investment channels attracted a large volume of capital and saw significant growth, except for the savings deposit channel. The investment channels of gold, securities, and real estate all thrived. For instance, the real estate prices in the first six months of the year increased by about 60 per cent.

For securities, stock prices in the first months of the year also increased and the VN-Index reached more than 1,600 points. However, with impacts from international markets and correction in management activities for the stock market, this growth started to slow down.

Last year, Việt Nam's stock market was one of the markets with the deepest decline and had the slowest recovery among regional countries.

Meanwhile, Việt Nam's gold market always depends on the global gold price. In the first months of the year, the global gold price also increased due to high inflation around the world. After that, gold prices saw fluctuations, and recently experienced a steep drop. 

The gold market was not very attractive in 2022. How will this market develop in 2023?

This year, the global economy is forecast to decline and production will not see large growth. The stock market is predicted to move on the downward trend, while the gold price is likely to increase. 

I think the gold price this year is still on an upward trend and experts forecast that the gold price in 2023 may increase to up to US$2,000 per ounce. This is a relatively high price compared to that in recent years.

Obviously, whether the price of gold increase or decrease depends on many different factors, especially the Fed's decision to raise interest rates in 2023 to keep the US dollar stable. So, gold remains an attractive investment channel in 2023.

Last year, the real estate market experienced many mixed developments with excitement at the beginning of the year, but was more subdued at the end. How do you evaluate this investment channel in 2023?

In 2021-22, the real estate market price and supply increased sharply, though the liquidity on the market was not abundant. 

In the second half of 2022, the market stagnated after the central bank requested to tighten management of credit risks in the fields of real estate and securities. 

In the first half of 2023, the restructuring process of the real estate market continues, which is expected to make it more transparent and attractive. 

Besides that, many localities such as Hà Nội, HCM City, and Bắc Giang and Thanh Hóa provinces, are creating favourable conditions for investors in housing development, especially affordable housing and social housing. 

Therefore, in the second half of this year, this market is expected to have more products and market liquidity will be better, and prices will be more affordable for house seekers. Thus, the real estate market in the second half of the year is likely to develop strongly.

Vietnamese stock market had periods of high growth in 2022. However, the fluctuations in the world economy caused this market to turn around. How do you forecast this investment channel in 2023?

In 2022, the stock market fluctuated strongly due to many reasons. This was in line with the common trend that the stock markets around the world all dropped due to high global inflation. 

Additionally, many governments raised interest rates, drawing the cash flow out of the stock market.  

In addition, the domestic stock market's recovery was also affected by enhancing management as well as investigation into a series of violations.  

Việt Nam gained an economic growth rate of 8 per cent in 2022 and VN-Index recovered to more than 1,000 points at the end of 2022 while the restructuring process still followed the outline of the plan set out by the Government. 

On that basis, Vietnamese stock market's operation will move more in line with international practices and be more transparent. So, this year, the market is hoped to begin a process of returning to an increase and more stable growth. 

Commercial banks raced to increase interest rates on deposits, which made this investment channel attractive to many individual investors. How do you assess the attractiveness of this investment channel in 2023?

In 2023, commercial banks still need to continue to raise capital, meeting the demand for lending and other activities of the banks. 

Though banks agree that the average interest rate is around 9.5 per cent, this is only a temporary investment channel to attract unused capital.

This year, there will be many investment channels with higher efficiency than savings. So, banking is expected to be the investment channel with moderate development, and not be as hot as previously. — VNS