Vietnam Economic News: 7.6 – 14.6.2025
Summary of Vietnam Economic News: 7.6 - 14.6.2025
---
Summary of Vietnam Economic News: 7.6 - 14.6.2025 ---
VIETNAM PARLIAMENT APPROVES HIKING TAX ON ALCOHOLIC DRINKS TO 90% BY 2031
Reuters News – 14 June 2025
Vietnam's National Assembly on Saturday approved a proposal to raise the special consumption tax on alcoholic beverages to 90% by 2031 from the current 65%, a move that will add to challenges facing the industry even though the top rate won't be as high as first flagged. Under the legislation, the tax rate on beer and strong liquor will rise to 70% by 2027, a year later than initially proposed, before reaching 90% in 2031. Vietnam currently imposes a 65% tax on these products and the initial proposal last year had the tax rising to as high as 100%. The finance ministry has said the aim of the higher taxes is to curb alcohol consumption. Vietnam is Southeast Asia's second-largest beer market, according to a report by consultancy KPMG in 2024. Vietnam's beer industry, led by Dutch brewer Heineken, Denmark's Carlsberg, and local brewers Sabeco and Habeco, has already faced challenges from stringent drink-driving laws introduced in 2019, which set a zero-alcohol limit for drivers. The country's Beer and Alcoholic Beverage Association chief has said industry revenue has declined for the past three years. In response to weakening demand and the initial proposal for the tax hike, Heineken last year suspended operations at one of its Vietnam breweries. On Saturday, the lawmakers also approved a new levy of eight percent on sugary drinks exceeding 5g/100ml of sugar that will take effect in 2027 and rise to 10% in 2028.
VIETNAM ADMITTED AS BRICS 'PARTNER COUNTRY'
Reuters News – 13 June 2025
Vietnam has been formally admitted as a "partner country" of the BRICS group of major emerging economies, Brazil's government said on Friday, as the bloc presses ahead with an expansion push. Vietnam is the tenth nation to receive this status, which allows invited countries to participate in BRICS summits and other discussion sessions. Vietnam had expressed earlier this year it was ready to discuss a partnership with BRICS, whose original members were Brazil, Russia, India and China. "The government of Brazil welcomes the decision of the Vietnamese government," said the South American country, which holds the bloc's presidency in 2025. "Vietnam stands out as a relevant actor in Asia. Its efforts in favour of South-South cooperation and sustainable development reinforce its convergence with the interests of the group," it added. Founded in 2009 and soon expanded to add South Africa, the group has recently also included Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates, making it a growing diplomatic counterweight to traditional Western powers. Belarus, Bolivia, Kazakhstan, Cuba, Malaysia, Nigeria, Thailand, Uganda and Uzbekistan are its other partner countries.
SUN PHUQUOC AIRWAYS TO OPERATE AIRBUS JETS, IN TALKS WITH BOEING FOR DREAMLINER
Reuters News – 13 June 2025
Vietnam's newly established Sun PhuQuoc Airways will initially operate Airbus's narrow-body aircraft, including the A321neo, it said on Friday. The airline is also in talks with Boeing to purchase wide-body aircraft, including Boeing 787-9 and Boeing 787-10 jets, it said in a statement. State media reported last month the airline aimed at launching its maiden flight in the fourth quarter of this year and to expand its fleet to 31 planes by the end of 2030. The company aims to begin ticket sales from the end of October 2025, it said in its Friday statement. Sun PhuQuoc will focus on services between Phu Quoc Island and Vietnam's major cities, including Hanoi, Ho Chi Minh City and Danang, and also destinations in Japan, South Korea and China, it said.
MOODY'S RATINGS AFFIRMS VIETNAM'S BA2 RATING, MAINTAINS STABLE OUTLOOK
Reuters News – 5 June 2025
Moody's Ratings has retained the Government of Vietnam's issuer and senior unsecured ratings at Ba2 and maintained the stable outlook, the New Yorkheadquartered credit rating giant said Monday. The latest credit rating upgrade of the Vietnamese government was in September 2022, from Ba3 to Ba2. The rating affirmation reflects Vietnam's track record of robust long-term growth prospects, trade dynamism, and attractiveness as a foreign investment destination, Moody’s said. Relatively low and stable debt burden, and strong debt affordability also underpins Vietnam's credit strengths, it added. According to Moody's, it is expected that the US, Vietnam negotiations to result in average effective tariffs on Vietnamese exports to US to be lower than 46% proposed on April 2. Moody's sees no capital withdrawals or production relocations from Vietnam despite the US tariff uncertainty
VIETNAM LAUNCHES FIRST PHASE OF EMISSIONS TRADING SCHEME
Reuters News – 11 June 2025
Vietnam has formally launched the pilot phase of an emissions trading scheme aimed at encouraging three major industrial sectors to cut the amount of carbon dioxide they produce, the government said on Tuesday. Under the scheme, Vietnam's steel, cement and thermal power producers will be forced to buy allowances to cover their carbon dioxide intensity - the amount of CO2 generated per unit of output, according to a decree issued by the government. The new scheme will cover around 50% of Vietnam's total CO2 emissions over its first phase, which will last until 2029. It will then be expanded to other sectors, including cargo transportation and commercial buildings. The first batch of emission allowances for 2025- 2026 will be allocated to the companies by the end of this year. Firms that exceed their allowances will have to make up the shortfall by buying credits on the market. The scheme will also allow firms to offset as much as 30% of their emissions by buying credits from low-carbon projects at home or overseas. The new ETS is unlikely to have an immediate impact on the emissions of major industries, with most of the allowances expected to be allocated free of charge in the first phase, said Mai Duong, an analyst at Veyt, a carbon market data provider. "The priority is first to help entities adapt to the system, rules and regulations, rather than delivering immediate environmental impacts," she said. Carbon trading is set to become a key part of Vietnam's efforts to meet a target to achieve "net zero" emissions by 2050. Vietnam's emissions have been rising in recent years, mostly as a result of a surge in coal-fired power generation, which soared nearly 18% last year. Crude steel production in 2024 also jumped 15% on the year.