Partial social distancing helps Vietnam mitigate negative economic Covid-19 impacts
The nationwide distancing order in the first 15 days of April was one of the key factors leading to GDP growth in the second quarter at just 0.36% year-on-year.
Instead of adopting nationwide distancing measures, a partial stay-at-home entailing only localities hit by Covid-19 this time would help Vietnam alleviate the pandemic’s economic pain, according to Tran Quoc Phuong, vice minister of Planning and Investment.
| Tran Quoc Phuong, vice minister of Planning and Investment. Photo: MPI. |
The nationwide distancing campaign implemented in the first 15 days of April was one of the key factors leading to the GDP growth in the second quarter at just 0.36% year-on-year, Phuong said at a monthly government press meeting on August 3.
Phuong said the current Covid-19 resurgence in Danang and other ten localities would affect Vietnam’s economy. Tourism and transportation are hit immediately with cancellations of tours and transport contracts.
Phuong referred to a report of the Ministry of Planning and Investment (MPI) in June saying if Vietnam faces a second wave of Covid-19 outbreak, the socio-economic impacts would be significant.
However, to fully evaluate the impacts of this pandemic resurgence to the economy, the MPI would need to gather more information, Phuong stated.
Economic forecast has never been more difficult given many current uncertainties, he said. The World Bank in March had expected Vietnam’s GDP growth in 2020 to be around 4.9%, but has revised down to 2.9% in its latest prediction.
According to Phuong, the MPI is set to submit to Prime Minister Nguyen Xuan Phuc detailed growth scenarios for Vietnam in August.
In July, Vietnam’s consumer price index (CPI), the main gauge for inflation, expanded 0.4% month-on-month and 3.39% year-on-year. Core inflation was 0.09% month-on-month and 2.31% year-on-year.
During the first seven months of this year, inflation averaged 2.74% year-on-year.
Meanwhile, Vietnam’s trade surplus during the period is estimated at a record high of US$6.5 billion. There were 75,200 newly established enterprises during the seven-month period, but the number of those suspending operations or completing the bankruptcy process reached nearly 31,000.
In the first six months of 2020, 30.8 million workers aged 15 and over in Vietnam were hit by the Covid-19 pandemic, either becoming unemployed, being forced to take unpaid leave or having their working hours reduced
With up to 70% of enterprises in Vietnam being affected by the Covid-19 pandemic, the number could be around 3.5 – 5 million in the third quarter this year.
