Vietnam’s economy could thrive again after social distancing eased: WB

  •  Wednesday, May 06, 2020

The World Bank (WB) has issued an update on Vietnam’s macro-economy for May, in which it said the economy may prosper again after social distancing measures were eased nationwide on April 23.

Workers produce garment products for export.
Workers produce garment products for export.

The WB noted that after posting GDP growth of 3.8 percent in the first quarter of this year, Vietnam’s economy then showed signs of recession in April, when the index of industrial production fell 13.3 percent month-on-month - the sharpest decline ever. Retail sales fell 9.6 percent year-on-year as consumers encountered many changes and travel restrictions. Meanwhile, passenger and goods transport contracted 27.5 percent and 7.2 percent, respectively.

It also cited the General Statistics Office (GSO)'s data as reporting that employment in the processing and manufacturing sector was affected most by the COVID-19 pandemic (1.2 million jobs influenced in Q1), followed by wholesale and retail (1.1 million jobs) and accommodation (740,000 jobs).

Exports grew by an estimated 4.7 percent year-on-year between January and April compared to 6.5 percent in the same period last year.

Committed FDI reached US$12.3 billion in the first four months, down 15.5 percent year-on-year. Registered FDI surprisingly rebounded in April, by 81 percent month-on-month and 62 percent year-on-year, according to the WB.

Credit growth, meanwhile, bounced back in March after being stagnant in January and February. The State Bank of Vietnam said credit growth in late March stood at 1.3 percent compared to the beginning of the year and about 11 percent year-on-year.

The State Bank of Vietnam has provided aid packages since early March to allow banks to restructure loans and cut interest rates for borrowers. It also considered support for certain commercial banks to improve liquidity via raising credit limits so that these banks could increase loans for businesses facing financial difficulties.

Meanwhile, Fitch Ratings has revised Vietnam’s outlook from "positive” to "stable” and maintained the country’s credit rating at BB.

The outlook revision reflects the impact of the escalating COVID-19 pandemic on Vietnam’s economy through its tourism and export sectors and weakening domestic demand. It also demonstrates the country’s strong medium-term growth prospects, lengthening record of macro-stability, lower government debt levels, and stronger external finances compared with its peers, including foreign-exchange reserves built up over the previous few years.

NDO

  •  
Other news

Production and business activities in Yen Bai province were resumed in early May after one month being suspended to implement social distancing measures.

An indigenous black chicken farming model in Lao Chai commune of Mu Cang Chai district that generates an annual income of over 100 million VND.

More than 117,600 households in Yen Bai province were recognised as production and business role models between 2016 and 2018, including over 93,400 at the communal level and 24,000 others at the district level.

The People’s Committee of northern Yen Bai province has licenced 14 industrial projects with a combined registered capital of 552 billion VND (23.5 million USD) and 11 million USD, in Luc Yen district in the 2016 – 2020 period.

The bank predicts that FDI inflow to Vietnam will fall to less than US$10 billion in 2020.

Standard Chartered Bank has forecast that the growth of Vietnam’s economy will slow down to 3.3% in 2020 due to the impacts of external challenges.

News by days:
In: This category All categories
 
VIDEO