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Vietnam economy expects to stay resolved to prevent negative economic growth

August 04, 2020 | 08:37

“We must stay calm and resolved to continue performing the dual tasks of containing COVID-19 and preventing economic fragility and negative growth.” said PM in the meeting on August 2.

vietnams gdp forecasted to reach 38 in 2020 Vietnam's GDP forecasted to reach 3.8% in 2020
vietnam gdp growth may reach 38 in 2020 Vietnam GDP growth may reach 3.8% in 2020
oxford economics forecast vietnams gdp to grow 8 in 2021 Oxford Economics forecast Vietnam's GDP to grow 8% in 2021
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Vietnam's GDP is predicted to grow 3.8 percent this year. Photo: VOV

“We must stay calm and resolved to continue performing the dual tasks of containing COVID-19 and preventing economic fragility and negative growth,” Prime Minister Nguyen Xuan Phuc has said in the context of the pandemic resurfacing in Vietnam with complexity.

More efforts are required to accelerate public investment disbursement, better implement both financial and fiscal policies and push ahead with investment attraction, especially capital flows from the private sector and foreign businesses, the Government leader said at a meeting on August 2 to review the socio-economic development in July and the past seven months.

With free trade agreements like the EU-Vietnam Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Tran-Pacific Partnership (CPTPP), Vietnam needs to enhance exports and expand the market, he suggested, asking the Ministry of Industry and Trade to put forth more specific measures on domestic consumption stimulation.

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PM Nguyen Xuan Phuc speaks at a meeting to review socio-economic situation in July and past seven months. Photo: Nhan dan (People)

The PM noted that with the return of the pandemic, stimulus measures must be adjusted in accordance with the priority of preventing the disease from spreading, VNA reported.

He urged ministries and agencies to firstly adopt measures to ensure socio-economic security and safety, protect very economic sector, especially businesses, and prevent widespread unemployment

Ministries need to map out suitable growth scenarios and better coordinate in the statistics work, he said.

PM Phuc singled out limitations in statistics work, citing as an example the gap in export-import statistics provided by difference agencies, partially due to the inefficient coordination between the General Department of Vietnam Customs, the General Statistics Office, the Ministry of Industry and Trade and the Ministry of Finance.

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Seafood processing for export. Photo: Cong Thuong (Industry and Trade)

He also requested the Ministry of Finance and the State Bank of Vietnam to update monetary, credit and State budget statistics more quickly.

The PM stressed that statistical data must be accurate and complete, in accordance with the law.

The Government leader repeated his request that ministries review and update growth scenarios for the third quarter, the whole year and 2021, along with measures to support the national economy, enterprises, cooperatives, business households and labourers.

Vietnam's economic prospects in 2020 would depend on pandemic control ability

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Photo: VNA

Vietnam’s gross domestic product (GDP) expanded 1.81 percent during the first six months of 2020, the lowest first-half growth pace since 2011, according to the General Statistics Office (GSO).

In the second quarter alone, the GDP rose by just 0.36 percent year on year, which was also the smallest expansion in Q2 during the 2011 – 2020 period.

This was attributed to the fact that the economy was hit hardest by the COVID-19 pandemic in Q2, when the Government ramped up social distancing measures, the GSO explained.

However, the office predicted that the country’s Vietnam’s GDP in the third and fourth quarters will grow better than it did in the first half of the year as the country still has ample space for growth.

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Vietnamese lychee on Japanese supermarket shelves. Photo: VnExpress

It pointed to positive signs in agriculture despite the sector being affected by drought, saltwater intrusion, COVID-19, and African swine fever, with rice output in the autumn-spring crop increasing year-on-year.

Industry gave momentum to the national economy, rising 2.71 percent, with processing and manufacturing up 4.96 percent.

Though there were only 62,000 firms established in the first half, down 7.3 percent year-on-year, the number of new enterprises stood at 13,700 in June alone, up 27.9 percent from the previous month.

Vietnam’s economic growth rate this year would reach 3.8 percent if there is no second COVID-19 outbreak in the second half of the year and economic activities gradually resume, the Vietnam Institute for Economic and Policy Research (VERP) has predicted.

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Photo: Dau Tu (Investment Review)

However, if COVID-19 in major economic and financial centres in the world recurs strongly, countries may have to extend lockdown until the fourth quarter of 2020. As a result, Vietnam's import and export activities would be seriously affected and not be able to recover in 2020, leading to weak growth of domestic production.

At the same time, accommodation and catering services have no momentum to recover due to a lack of foreign tourists, while domestic demand for these services is also limited due to the poor economic situation, leading to a GDP growth forecast of 2.2 percent.

VEPR experts said that Vietnam's economic prospects in 2020 would depend on the ability to control the disease, not only domestically but also in the world, according to Viet Nam News.

They said factors that support the growth in the second half of the year included expectations on economic prospects due to the signing of the European Union-Vietnam Free Trade Agreement (EVFTA), disbursement progress of public investment projects, investment waves into Vietnam and a stable macroeconomy./.

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