Vietnam’s tourism sector could lose US$ 5bln due to COVID-19

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The Ministry of Planning and Investment has just sent a document to the standing government to evaluate the impact of acute pneumonia caused by the new strain of coronavirus (COVID-19), update the growth forecast in 2020 and propose solutions to direct and administer the implementation of socio-economic development targets.

After workings with domestic and foreign organizations, associations and enterprises on February 11, the Ministry of Planning and Investment issued Document No.111 /BKHDT-DTNN dated on February 11, 2020 to provincial and municipal People's Committees under the central government to request supporting and removing difficulties for businesses.

The outbreak of Covid-19 epidemic is considered to be very fast, serious, complicated, unpredictable and unpredictable.

According to the Ministry of Planning and Investment, international organizations assessed that the world’s economy in 2020 would continue the downward trend along with the impact of the epidemic. The Chinese and global economy will be seriously affected.

The damage could rise three to four times higher than the SARS epidemic, up to US$ 160 billion.

In particular, Asia's economic growth is expected to decline by 4 percent to 4.3 percent over last year. Singapore and Thailand are likely to be most affected countries in ASEAN, followed by Hong Kong (China) and Vietnam.

In addition to being influenced by global and regional economic growth, Vietnam's socio-economic fields are also directly affected.

If the epidemic ends in the first quarter of 2020, the index of consumer price (CPI) in 2020 will increase by 3.96 percent compared to 2019; and in case of the Covid-19 ends in the second quarter of 2020, the CPI in average of 2020 is expected to increase 4.86 percent compared to 2019.

In the electricity - electronics industry with the largest import-export turnover of US$ 37.5 billion between Vietnam and China, quarantine measures will affect the supply of inputs for production as well as the consumption market for Vietnam's electronics industry, especially affecting the source of input components for domestic production.

Similarly, many other manufacturing industries have imported input materials from China such as leather shoes, textiles, etc.

Domestic steel enterprises are basically not significantly affected; however, the steel production project of Viet Trung Metallurgy and Mineral Co., Ltd (VTM) will be severely affected, another project of the mineral industry such as the copper smelting project in Lao Cai will also face difficulties. .

Regarding tourism sector, Vietnam received about 1.45 million Chinese visitors in the first quarter of 2019. In January of 2020, the number of Chinese visitors to Vietnam dropped by 644,000 people.

With temporary restrictions, no Chinese tourists reported to come to the country during this epidemic period.

Concerning to the spending survey of international visitors to Vietnam, each Chinese tourist spent about US$ 743.6 on average while each visitor from other countries spent an average of US$ 1,141.5.

Therefore, if the epidemic lasts until the end of the first quarter of 2020, the loss of revenue from international visitors in 2020 is about US$ 2.3 billion and if the epidemic lasts for the second quarter, Vietnam’s tourist sector will lose about US$ 5 billion./.