Vietnam's economy starts growing again

VCN- Domestic economic activities have thrived again, but the economy has not yet fully recovered. This is the World Bank’s evaluation on Vietnam’s economy in its recent macroeconomic report.
vietnams economy starts growing again
Vietnam's retail sales have recovered strongly after social distancing was relaxed. Photo: H. Anh.

Retail market also recovered

According to the World Bank (WB), after being affected by social distancing in April, the Industrial Production Index (IPI) in May rebounded 11% compared to April and decreased 3% compared to May 2019.

Retail sales also recovered strongly in May. Passenger and freight carriage increased by 116% and 32%, respectively, in May compared to April, due to measures to restrict domestic travel were gradually relaxed from April 23.

According to the WB, although Vietnam's export turnover increased by about 5% in May compared to April, it decreased by 5.5% compared to the same period last year, due to weak external demand and possibly due to some disruptions in global supply chains.

Export turnover of key labor-intensive items of Vietnam such as garments and leather shoes decreased by 14% and 5%(compared to the same period last year) while technology export items, such as smartphones, decreased by 9% (compared to the same period last year).

In addition, FDI inflows into Vietnamin May wereslower than in April. In the first five months of 2020, the committed value of FDI reached US$13.9 billion, which is still a high level butreduced by 17% compared to the same period last year.

In the first four months of 2020, credit allocated to the economy is estimated to increase by 10% compared to the same period last year.

According to the World Bank, due to the decline in import and export activities, tax revenue related to import and export decreased by 19% (compared to the same period last year). Domestic revenue dropped even more in April, when the state revenue decreased nearly 25% from the previous month, only 65% compared to April 2019.

Economic activity much lower than before Covid-19

Despite the fact that Vietnam's economy started growing again, the World Bank said that it has not yet fully recovered.

Accordingly, CPI in May sawless fluctuations, so the inflation rate was only 2.4% compared the same period last year, lower than the 2.9% in April and 4%in January 2020.

The price level slowed down mainly due to the decline in domestic food demand, the price of crude oil fell to a record low level in the international market, causing a spread effect to domestic gasoline prices.

The total Government revenue in the first four months decreased by 5.9% compared to the same period last year. The largest reduction was recorded for value added tax and corporate income tax, at 9.3% and 7.3%, respectively.

The World Bank affirmed that Vietnam's economy responded quickly after the measures of domestic social distancing were relaxed in May, with an increase of 10% in manufacturing, processing and retail sales.

However, economic activity was still much lower than the period before Covid-19. The FDI sector began to be affected by weak global demand, while the Government continued to use fiscal and monetary policies to compensate for the financial impact of the Covid-19, leading to a high growth of domestic bank credit and a decline in budget revenues.

“The second-quarter GDP data is expected to be published in the future, which will help monitor Vietnam's economic trajectory. Regardless of the data, it is necessary to pay more attention to the possibility of the impact on inflation due to monetary easing and an increase in overspending due to tax revenues have not met the targets set for early 2020,”the World Bank noted.

By HoaiAnh/Kieu Oanh

Related News

Fiscal policy needs to return to normal state in new period

Fiscal policy needs to return to normal state in new period

VCN - To recover the economy during and after the Covid-19 pandemic, fiscal policy has been flexibly and promptly managed, becoming a solid foundation to help businesses and the economy gradually overcome difficulties. After nearly 5 years, although there are still difficulties, the economy is gradually returning to a high growth trajectory. In that context, it is necessary to let fiscal policy return to normal state.
Risks for the economy when cash flow has not yet been put in to production and business

Risks for the economy when cash flow has not yet been put in to production and business

VCN - Investment channels in Vietnam have a lot of potential, but financial and banking expert Dr. Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, said that cash flow into production and business is still modest, leading to risks for the economy.
Vietnam to achieve credit rating as set target

Vietnam to achieve credit rating as set target

VCN - With the current credit rating scale, Vietnam is getting closer to the target of raising the investment rating grade by 2030 set out in the National Credit Rating Improvement Project by 2030.
Note for businesses when converting green and digital

Note for businesses when converting green and digital

VCN - Green transformation and digital transformation have been identified by businesses as a mandatory path if they want to develop long-term. However, there are many issues that businesses need to pay attention to right from the start of the transformation if they want to achieve efficiency.

Latest News

Agricultural, forestry and fishery trade surplus value shoots up

Agricultural, forestry and fishery trade surplus value shoots up

VCN - According to the Ministry of Agriculture and Rural Development, the total export turnover of agricultural, forestry and fishery products in the first 10 months reached 51.74 billion USD, up 20.2% over the same period in 2023. Notably, the trade surplus value recorded a spectacular increase year on year.
New export and business cooperation opportunities from "dual conversion"

New export and business cooperation opportunities from "dual conversion"

VCN - According to a recent study from NielsenIQ, 16% of Vietnamese consumers consider a sustainable future as one of the important factors in their consumption decisions.
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - As one of Vietnam's strong export industries to the UK, especially when the Vietnam - United Kingdom of Great Britain and Northern Ireland Free Trade Agreement (UKVFTA) comes into effect, with a detailed information approach strategy, it has created a great driving force to promote the export of Vietnamese seafood products to this market.

More News

Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

VCN - By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN – In recent years, with the rapid development of cross-border e-commerce (CBEC) platforms, domestic enterprises in Vietnam have been facing numerous difficulties and challenges.
Vietnam, Malaysia eye new milestone in trade ties

Vietnam, Malaysia eye new milestone in trade ties

The official visit to Malaysia from November 21-23 by Party General Secretary To Lam is expected to open up new opportunities for and mark a new milestone in the economic and trade cooperation between Vietnam and Malaysia. Vietnam and Malaysia are key economic, trade, and investment partners. Their economic and trade ties have steadily grown since the two nations established diplomatic relations in 1973.
Shrimp exports surge in 10 months, generating 3.2 billion USD

Shrimp exports surge in 10 months, generating 3.2 billion USD

Vietnam’s shrimp exports in October reached US$394 million, a strong 24% increase year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Vietnam’s exports to the U.S. near US$100 billion milestone

Vietnam’s exports to the U.S. near US$100 billion milestone

VCN - By the end of October, Vietnam's exports to the United States approached US$100 billion, reaffirming its position as Vietnam's largest export market.
From the “abnormal” coffee price, worries about the new crop

From the “abnormal” coffee price, worries about the new crop

VCN - The Vietnamese coffee industry enters the new crop with the question of what is a reasonable price to ensure benefits for coffee growers while still retaining international consumers.
What obstacles limit the market share of Vietnamese goods in the UK?

What obstacles limit the market share of Vietnamese goods in the UK?

VCN - Vietnamese goods account for only about 1% of total imports into the UK market. One of the reasons is that they have not yet built their own brands and have not focused on effective strategies and approaches to market information.
Why seafood exports to some Middle Eastern Countries are stalled

Why seafood exports to some Middle Eastern Countries are stalled

VCN - Several shipments of seafood exported to certain Middle Eastern countries have been delayed due to legal challenges related to consular legalization procedures. This has created significant bottlenecks in accessing these markets.
Storm No. 3 destroys profits of many insurance companies

Storm No. 3 destroys profits of many insurance companies

VCN - Due to the impact of storm No. 3, the business results of the third quarter and the first 9 months of 2024 of the insurance sector have been significantly affected. This requires more efforts from businesses for the results of the whole year 2024.
Read More

Your care

Latest Most read
Agricultural, forestry and fishery trade surplus value shoots up

Agricultural, forestry and fishery trade surplus value shoots up

VCN - According to the Ministry of Agriculture and Rural Development, the total export turnover of agricultural, forestry and fishery products in the first 10 months reached 51.74 billion USD, up 20.2% over the same period in 2023. Notably, the trade surp
New export and business cooperation opportunities from "dual conversion"

New export and business cooperation opportunities from "dual conversion"

According to a recent study from NielsenIQ, 16% of Vietnamese consumers consider a sustainable future as one of the important factors in their consumption decisions.
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - Mr. Nguyen Hoai Nam, Deputy General Secretary, Vietnam Association of Seafood Exporters and Producers (VASEP), said that the advantage that UKVFTA brings is that the main products of the seafood industry enjoy 0% import tax to the UK, especially key
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Mobile Version