Statistics show that the gross domestic product (GDP) in the first 6 months of 2020 increased by 1.81%, which is the lowest increase of the first 6 months in the period of 2011-2020. However, this can also be considered a success because Vietnam’s economic growth has mainted stable.
In the second quarter of 2020, due to the impact of the Covid-19 epidemic, Vietnam’s gross domestic product (GDP) is estimated to increase by only 0.36% over the same period last year, which is the lowest increase of the second quarter during the period of 2011-202. The first 6 months of 2020’s GDP increased by 1.81%, which is also the lowest increase of 6 months between 2011 and 2020.
In particular, agriculture, forestry and fishery sector increased by 1.19%, contributing 11.89% to the general growth; industrial and construction sector increased by 2.98%, contributing 73.14%; service sector increased by 0.57%, contributing 14.97%.
Value added of industrial production is estimated to increase by 2.71% over the same period last year. In which, processing and manufacturing industry increased by 4.96%, contributing 1.1 percentage points to the overall growth of the economy; power production and distribution increased by 3.04%, contributing 0.15 percentage points; water supply and waste treatment increased by 3.76%, contributing 0.03 percentage points; mining decreased by 5.4% (due to a sharp decrease of 13.9% in crude oil production and 9.1% decrease in natural gas), contributing minus 0.35 percentage points to the general growth.
Consumption index of the processing and manufacturing sector increased by 8.1% over the previous month and by 3% over the same period last year. Generally, in the first 6 months, the consumption index of the processing and manufacturing industry increased by 4.3% over the same period last year.
In June 2020, there were 13,725 newly established enterprises with a total registered capital of VND 139.1 trillion and 100 thousand employees, an increase of 27.9%, 23.4% and 9.4% in the number of enterprises, registered capital and number of employees, respectively, compared to the previous month. The average registered capital of a newly established enterprise reached VND 10.1 billion, which is a 3.5% decrease over the previous month and a 31% decrease compared to the same period in 2019. There were 4,998 enterprises returning to operation, 3,217 enterprises temporarily suspending business operation, 3,843 enterprises about to disolve, 1,368 enterprises completing dissolution procedures, and 5,146 enterprises not operating at their registered address.
Generally, in the first 6 months of the year, there have been 62 thousand newly established enterprises with a total registered capital of VND 697.1 trillion and a total registered labor of 507.2 thousand employees, a decrease of 7.3%, 19% and 21.8% in the number of enterprises, registered capital and number of employees, respectively, compared to the same period last year. Average registered capital of newly established enterprises in 6 months reached VND 11.2 billion, decreasing by 12.5% compared to the same period last year.
Due to the negative impact of Covid-19 epidemic, total realized investment capital in the first 6 months of 2020 increased by 3.4% over the same period in 2019, which is the lowest increase in the period 2016-2020. However, the growth rate of realized capital from the state budget in June and the first 6 months of the year hit a record high within the period 2016-2020.
In the first half of 2020, realized FDI capital was estimated at USD 8.65 billion, decreasing by 4.9% against same period last year. Realized investment capital in the second quarter of 2020 at current prices was estimated at VND 481.2 trillion, up 4% over the same period last year. Generally, for the first 6 months of 2020, realized investment capital at current prices was estimated at VND 850.3 trillion, up 3.4% over the same period last year and equal to 33% of GDP.
Total retail sales of consumer goods and services in June were estimated at VND 431 trillion, which is a rise of 6.2% over the previous month and 5.3% over the same period last year. For the second quarter of 2020, total estimated retail sales of consumer goods and services reached VND 1,154.9 trillion, down 5.8% from the previous quarter and 4.6% from the same period last year, of which retail sales of goods were VND 928.5 trillion, of accommodation and catering were VND 108.5 trillion, of tourism were VND 2.5 trillion. Retail sales of other service were VND 115.4 trillion.
For the first 6 months of 2020, if excluding the price reduction factor of 5,3%, total retail sales of consumer goods and services reached VND 2,380.8 trillion, down 0.8% over the same period last year.
The Covid-19 epidemic has negatively impacted leading trade partners of Vietnam, which has greatly affected the import and export turnover of many commodities. Total import and export turnovers in June were estimated at USD 41.5 billion, up 1.5% over the same period last year. For the first 6 months of 2020, total import and export turnover of goods reached USD 238.4 billion, a decrease of 2.1% over the same period last year.
In June 2020, export turnovers were estimated at USD 21 billion, up 9.5% over the previous month. The turnover of some commodities was affected by the decline in demand in the US and European markets. However, export turnover of electronics, computers and components still reached a fair increase of 26.6% over the same period last year. In the second quarter of 2020, export turnover reached USD 57.98 billion, decreasing by 9% from the same period last year and 8.3% from the first quarter of this year. For the first 6 months of 2020, export turnover was estimated at VND 121.21 billion, down 1.1% compared to the same period last year.
Import turnovers in June were estimated at USD 20.5 billion, increasing by 12.8% over the previous month. Compared to the same period last year, import turnovers in June increased by 5.3%. In the second quarter of 2020, import turnover reached USD 57.68 billion, down 9.1% compared to the same period last year and 3% compared to the first quarter of this year. Generally, in the first 6 months of 2020, import turnover was estimated at USD 117.17 billion, down 3% over the same period last year.
Consumer price index (CPI) increased by 0.66% compared to the previous month, this is the highest increase in the period 2016-2020. In the second quarter of 2020, CPI decreased by 1.87% compared to the previous quarter and increased by 2.83% over the same period in 2019. Average CPI in the first 6 months of 2020 increased by 4.19% compared to the same period of 2019.
Average CPI in the first 6 months of this year increased due to a number of reasons: (i) Food prices rose by 3.38% over the same period last; (ii) Prices of food items increased by 14.28% over the same period last year, of which pork price rose by 68.2%; (iii) Prices of beverages, cigarettes and ready-to-wear garments have increased by 1.7% and 0.93%, respectively, over the same period in 2019.
Core inflation increased by 0.07% over the previous month and by 2.45% over the same period last year. The average core inflation in the first 6 months of 2020 increased by 2.81% compared to the same period in 2019.
>> Vietnam’s 5-month economic overview (May 2020)
Source: GSO, Prepared by VietnamCredit
