Vietnam’s 2020 economic growth could slow to 5.05% on pandemic

Vietnam could not realize the 6.8% GDP growth target for this year placed earlier. If the pandemic is controlled well in the second quarter, the country’s GDP growth is expected at about 5.32%. If the crisis lasts longer, the growth would be lower to around 5%, said Minister of Planning and Investment Nguyen Chi Dung.

The pandemic has left a comprehensive negative impact on all economic and social sectors of economies around the world. The situation in Vietnam has also been worsening when the GDP growth in the first quarter was estimated at 3.82%, the lowest since 2011.

It is expected that the 2020 consumer price index will increase by more than 4% if the government has no drastic price management measures. The public health crisis may cost Vietnam’s State budget revenue by VND145,000 billion ($6.2 billion), Dung estimated.  

The import-export revenue, investment, and FDI inflow will fall sharply due to the sharp decrease in global demands.

$2.6-billion support package approved 

At the meeting, Prime Minister Nguyen Xuan Phuc announced a VND62 trillion ($2.64 billion) to assist about 20 million people who lost jobs or had their business affected by the crisis.    

The government chief raised the financial support package to $22 billion from earlier-proposed $14 billion to back virus-hit firms by cutting interest rates, restructuring debts, exempting and reducing service fees, implementing preferential credit programs.

In the first three months of this year, nearly 35,000 enterprises withdrew from the market, a record high number. For the first time in decades, the number of businesses withdrawing from the market is greater than the number of newly registered businesses.

Nearly 85% of businesses said that the pandemic had narrowed their markets while 60% of them said that they are facing financial problems due to the crisis, according to a survey done by the Vietnam Chamber of Commerce and Industry (VCCI).

VCCI Chairman Vu Tien Loc was cited by the CafeF news website as saying Vietnam is facing a huge impact on the epidemic and the global recession. If the disease is complicated, only half of the enterprises in the market can survive for 6 months.

The survey result unveiled that if the pandemic lasts longer, nearly 30% of Vietnamese enterprises can only operate for a maximum of 3 months.

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