Vietnam's consumer spending set to grow by 4% in 2021
The shopping season during the year-end festivals could lead to higher consumer spending, which in turn serves as a driving force for growth in the remainder of the year.
Total revenues from retail sales and services in 2021 are set to rise by 3-4% against last year, lower than the original target of 8%, according to the Ministry of Industry and Trade (MoIT).
|Customers at Co.op mart Ha Dong, Hanoi. Photo: Le Nam|
For the first nine months of 2021, such revenues were estimated at VND3,367 trillion ($147.7 billion), down 7.1% year-on-year.
“The severe Covid-19 situation and restriction measures were the main reason behind the decline, especially as the outbreak took place in major cities such as Hanoi, Ho Chi Minh City, Danang, Binh Duong, or Dong Nai,” stated the MoIT.
According to the MoIT’s report, the enforcement of stay-at-home orders curbed the majority of business activities, while locals have been tightening spending and turning their focuses on daily basic necessities.
To further boost domestic consumption in the remaining months of 2021, the MoIT said it is committed to addressing concerns in business and production activities, especially those of major enterprises in industrial parks or economic zones.
“The aim is to ensure a speedy resumption of economic activities and keeping value chains intact, especially at a time when demands for goods and products would rise during the year-end period,” the ministry suggested.
Meanwhile, the MoIT would closely monitor the demand-supply balance and market prices of goods to timely intervene, if necessary, along with effective distribution of goods across localities, including the pandemic epicenters, for smooth movements of goods.
In line with these efforts, the ministry is scheduled to supervise the market during the year-end period to address trade fraud activities and ensure a healthy development environment for Vietnamese products.
The MoIT also plans to reopen in phases wholesale markets, supermarkets, convenience stores in the condition of complying with anti-Covid-19 measures to boost production and consumption, while trade promotion activities are expected to shift to online platforms to boost sales in late 2021 and early 2022.
“A series of promotion programs would kickstart in the year-end shopping period ahead of the New-year festivals,” it added.
The fourth Covid-19 pandemic caused severe impacts on trade and services activities in Hanoi, as the city was forced to suspend all non-essential business operations during the enforcement of social distancing rules.
As a result, total revenues of retail sales and services in the third quarter plunged by 34% against the previous quarter to VND92.2 trillion ($4.04 billion).
Overall, the figure was estimated at VND380 trillion ($16.67 billion) during the nine-month period. Of the total, revenue from retail sales amounted to VND269 trillion ($11.8 billion), accounting for 70.8% of the total and down 3.8% year-on-year.
Meanwhile, revenue from hotels and restaurants went down by 25% to VND28.4 trillion ($1.24 billion), or 7.5% of the total; tourism at VND2.2 trillion ($96.5 million), down 55.4% or 0.6% of the total.
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