Vietnam Pictorial

Economy

Vietnam attempts economy recovery

04/02/2021

Recently, the Politburo, the Party Central Committee’s Secretariat and the government have issued resolutions to protect people's health, stabilize the society, minimize damage to the economy and create conditions for maintaining and soon resuming production and business activities during the COVID-19 epidemic.

According to the Minister of Planning and Investment, Nguyen Chi Dung, the impact of the COVID-19 epidemic resonating with the economic decline since 2019 has comprehensively affected all economic and social fields of countries in the world. In Vietnam, the impact of the epidemic is very serious. The growth rate of the gross domestic product (GDP) in the first quarter was estimated to increase only 3.82% over the same period, the lowest from 2011 to the present.

The Prime Minister issued Directive No. 11 / CT-TTg on March 4, 2020 to direct ministries and sectors to promptly implement solutions such as interest rate reduction, debt restructuring, service fee exemption and reduction, implementing preferential credit programs, extending deadlines for tax and land rent payment; reducing electricity, petrol and service prices with a total value of nearly 22 billion US dollars.

The longer the epidemic lasts, the more serious the economic impact is. The 6.8% GDP growth target for the whole year will be difficult to achieve. GDP growth is forecast at about 5.32% in case the epidemic is controlled in the second quarter, and 5.05% in case the epidemic lasts until the third quarter.

Some macro indicators are at risk of strong impact such as, the state budget revenue may decrease by 145 trillion dong, import-export, private sector investment and foreign direct investment (FDI) may drop significantly due to the sharp decrease in global demand and investors tend to be cautious in making investment decisions and diverting to safer investment options.

Due to a proactive stockpile of raw materials since the end of 2019, production activities of enterprises
in Vinh Phuc province have not been much affected by the Covid-19 epidemic. Photo: Hoang Hung / VNA

Production process at an aquatic product processing facility
in Dong Thap province during the Covid-19 epidemic. Photo: Chuong Dai / VNA

The Mekong Delta harvests a record output of about 7.3 million tons of rice
in the Winter-Spring crop 2019-2020 despite being affected by Covid-19. Photo: VNA

Garment companies of the The Vietnam National Textile and Garment Group
produce medical protective clothing ordered by the Ministry of Health for the domestic market. Photo: Phuong Hoa / VNA

The specialized cultivation area of safe vegetables in Tien Yen commune,
Hoai Duc district has supplied nearly 20 tons of vegetables to supermarkets and marketplaces
in the inner city of Hanoi during Covid-19 epidemic. Photo: Vu Sinh / VNA

Tien Phong Commercial Joint Stock Bank (TPBank) quickly considers the list of customers
to take specific measures of support during Covid-19 epidemic. Photo: Tran Viet / VNA

RG Retail (BRG Group), which operates a chain of supply to more than 100 supermarkets like Fuji Mart, Hapro Mart and Intimex,
proactively coordinates with suppliers to increase 300-500% of essential commodities and food
in supermarkets and ten times the reserved goods in its central storage facility. Photo: Tran Viet / VNA

In this context, the government assigned the Ministry of Planning and Investment to take the lead and coordinate with the concerned ministries and branches in drafting a government's specialized resolution on tasks and solutions to overcome difficulties for production and business, promoting disbursement of public investment in the context of the COVID-19 pandemic.

The Prime Minister issued a Resolution of the Government on measures to support people facing difficulties due to the COVID-19 pandemic. The resolution will support about 20 million people with a budget of about 62,000 billion dong.

Regarding the scenario of proactive economic recovery after the epidemic, Minister Nguyen Chi Dung said that the COVID-19 epidemic had caused many difficulties and damages to economies around the world. It was an opportunity for those countries that can take advantage of the adjustment and rearrangement of the global economic and trade situation caused by the epidemic.

Since the onset of the Covid-19 pandemic at the beginning of the year, Vietnam has actively increased the interest of the international business community and investors to Vietnam as a safe and sustainable investment and business destination.

On the other hand, the government has also assessed the impact of the epidemic on industries, sectors and the economy, studies and forecasts trends and opportunities and has identified new drivers of growth as a basis for accelerating restructuring of the economy to accommodate new shifts and structures. These include development needs and digital transformation, labor demand, investment trends and consumption trends.

The government is directing the early formation of "economic revitalization" scenarios, concerning each industry, field, locality and enterprise before the COVID-19 ends so that the economy is ready to transfer to a new operating state, competitively and proactively participating in the new link chains and value chains formed after the epidemic. Vietnam will take advantage of all opportunities of the country to develop quicker and more sustainably than before the outbreak.

“Vietnam’s government has reacted to the pandemic early and fiercely. Vietnam’s economic policies seem quite in line with the situation,” said Prof. Andreas Stoffers - Country Director of Friedrich Naumann for Freedom (FNF) in Vietnam.

By VNA/VNP