Experts claim coronavirus plagues economic growth

A large number of domestic firms have their operations spoiled due to the coronavirus epidemic.

China has for many years remained Vietnam's major trading partner while being the largest importer for Vietnamese goods and the country’s second largest export market.

In recent days, China has deployed strict measures against the corona outbreak which emerged in Wuhan in the central region of China and has spread to dozens of countries and territories in the world, including Vietnam.

The shutdown of many cities in China has caused the delayed transportation and delivery of goods among China’s affected localities, thus resulting in a sharp drop in Vietnamese farm produce and aquatic products shipped to the neighbouring country.

Economics professor Warwick McKibbin from the Australian National University said the impacts caused by the virus on the global economy could be three or four times compared with the SARS outbreak in 2003. An estimated losses made by the former could amount to US$160 billion.

Economist Le Dang Doanh noted the corona virus pandemic has made negative impacts on the Vietnamese economy via many channels. It resulted in direct impacts on Vietnam’s trading activities with China as the shipments of Vietnamese farm produce to China are being stalled.

Amid the widespread epidemic, tourists from China and other countries are not eager to visit Vietnam, consequently making a sharp drop in tourism-related revenues.

“Vietnamese businesses must be alert to the epidemic situation and the best way is to find new markets and accept to sell goods at low prices a hope of expanding their export market destinations”, said Doanh.

Meanwhile, Dr. Nguyen Tri Hieu said that the coronavirus outbreak has caused negative impacts on Vietnamese trading activities with China, especially fruit exports like dragon fruit and watermelon while the restrictions for many Chinese types of food such meat and vegetables imported into Vietnam are also being minimized.

Hieu added the negative effects caused the epidemic spread across other fields, including food and transportation. Besides, Chinese workers failed to resume their work in Vietnam due to limited entry amid the complicated developments of the epidemic. This has also posed a threat to the operational efficiency of numerous Vietnamese enterprises.

He noted global stocks have slumped due to the disease while the Vietnamese stock market is not an exception. World stock and trade markets are expected to see strong fluctuations during February and even last until the end of March.

He went on to say that the government needs to strictly monitor the spread and development of the deadly virus, thereby updating locals and businesspersons the most accurate information.

The expert also recommended amid delayed exports to the Chinese market, Vietnamese businesses need to take alternative measures by increasing their exports to other markets and reducing their dependence on the Chinese market. Policy stimulus is also needed to boost domestic consumption and ease pressures on delayed exports.

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Regarding securities, investors should be calm to monitor the situation and development of the disease, not to rush to sell off stocks. They can shift their investment from stocks and bonds to safer financial channels. For instance, government bonds could be a good choice for investors to secure their investment", Hieu suggested.