ANZ: Consumer confidence grows in Feb

According to a report the bank released on February 25, the ANZ-Roy Morgan Vietnam Consumer Confidence has risen by 6.9 points to 142.3 in February with large increases in confidence for all indicators, well above the 2014 average of 133.3.

In terms of personal finances, 38% (up five percentage points) of Vietnamese said their families are ‘better off’ financially than a year ago compared to 21% (unchanged) who said their families are ‘worse off’ financially.

Of the respondents, 58% (up five percentage points) of Vietnamese expect their families will be ‘better off’ financially this time next year compared to just 7% (up one percentage point) who expect to be ‘worse off’ financially.

Over the next 12 months, 58% (up eight percentage points) said Vietnam will have ‘good times’ financially and only 13% (down one percentage point) expect ‘bad times’ financially.

In addition, 50% (up seven percentage points) of Vietnamese said now is a ‘good time to buy’ major household items compared to 10% (down one percentage point) who said now is a ‘bad time to buy’ major household items.

Glenn Maguire, ANZ Chief Economist for South Asia, ASEAN and Pacific, said in the report that the Lunar New Year has been ushered in with Vietnamese households displaying a record level of optimism on three key components of the consumer confidence index.

A record number of Vietnamese believe that they and their families are better off now than this time last year and a record number of Vietnamese similarly believe that they and their families will be better off a year from now. Not surprisingly, a record number of Vietnamese believe now is a good time to buy a major household item.

“The details of the consumer confidence survey provide us with some optimism that the dichotomy between external and domestic demand could well start to narrow over the course of 2015. Though we forecast the Vietnamese economy to remain on a sure and steady growth recovery over 2015-2016, the underperformance of the domestic sector may have made the extent of the recovery in external demand less apparent to ordinary households,” Maguire said.

With a more evenly distributed growth recovery aided by 50 basic points of rate cuts and several discrete Vietnam dong revaluations over the year, Vietnamese consumer confidence is likely to remain skewed towards the optimistic in the year ahead. This bodes well for a gradual strengthening in household consumption.