Typhoon Yagi causes Vietnam US$1.6 billion in damage

The Ministry of Planning and Investment (MPI) estimates that typhoon Yagi cost Vietnam's northern provinces VND40 trillion (US$1.6 billion). This means that the country's GDP growth rate would be 15% lower than previously projected.

Yagi causes severe damage in Quang Ninh Province. Photo: Thach Thao/The Hanoi Times

Minister of Planning and Investment Nguyen Chi Dung revealed the figures during a Government meeting on September 15.

“In addition to the loss of life, the storm caused significant damage to public and private assets,” said Dung. For instance, Haiphong, one of the hardest-hit areas, sustained losses of VND10.8 trillion ($435 million), equivalent to one-tenth of the city’s total 2023 budget revenue for 2023. Quang Ninh, which took the brunt of the storm, suffered damages worth VND23.77 trillion ($955 million).

According to the Minister, about 257,000 houses, 1,300 schools, and various infrastructure were destroyed or damaged. There were 305 dike incidents, mostly in large dike systems.

The agricultural sectors, including rice farming, crop cultivation, livestock, and aquaculture, were severely hit. Approximately 262,000 hectares of rice, crops, and fruit trees were submerged, and 2,250 aquaculture cages were damaged or washed away. Additionally, nearly 2.3 million livestock and poultry perished, and 310,000 urban trees were uprooted.

"The national and regional growth rates in the second half of the year are projected to slow down," Dung said, indicating that the third-quarter GDP could decline by 0.35%, and  0.22% in the fourth quarter, compared to scenarios without typhoon Yagi.

Overall, the GDP growth rate for the year may decline by 0.15% from the mid-year growth target of 6.8-7%.

Growth in the agriculture, forestry, and fisheries sectors is expected to decline by 0.33%, the industrial and construction sector by 0.05%, and services by 0.22%.

Several provinces hit hardest by the storm, such as Haiphong, Quang Ninh, Thai Nguyen, and Lao Cai, could see their gross regional domestic product (GRDP) fall by over 0.5%.

Typhoon Yagi, the strongest storm in 30 years, struck the Gulf of Tonkin on September 7, forcing the evacuation of nearly 13,000 households in Haiphong, Quang Ninh, and Thai Binh. The storm caused widespread power outages, water supply disruptions, and communications failures. Some areas remain flooded, and the risk of landslides persists, which is likely to exacerbate the damage.

Industrial and construction sectors were also devastated, particularly due to power and communication losses. Critical infrastructure, including roads, bridges, power grids, water supply systems, and schools, suffered severe damage.

In response to the economic losses caused by Typhoon Yagi, Prime Minister Pham Minh Chinh tasked the Ministry of Planning and Investment with submitting a disaster recovery resolution to the government. The policies aim to reassure the population, restore business activities, control inflation, and stimulate growth.

The Prime Minister outlined six key tasks and solutions, including policies to help individuals and businesses recover production. He directed the banking sector to study debt deferral, loan restructuring, and interest-free loan packages for storm-affected borrowers. The Social Policy Bank was instructed to provide loans to affected households, while the insurance sector was urged to promptly compensate businesses and individuals for their losses.

The Ministry of Finance was assigned to explore tax, fee, and duty reductions or deferrals. The Ministry of Industry and Trade was tasked with ensuring a steady supply of materials and inputs for business operations.

This year, the government aims to control inflation at below 4.5% and achieve GDP growth of around 7%. To promote growth, the Prime Minister emphasized the importance of accelerating public investment disbursement, combating corruption, and preventing profiteering. Ministries must ensure sufficient supplies of goods and raw materials for businesses, control prices, and prevent hoarding or price manipulation during the recovery period.

Government agencies are also developing policies to encourage growth in high-potential sectors, such as semiconductor manufacturing, free trade zones, and financial hubs.