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Vietnam’s economic overview in February 2020

Vietnam’s economic overview in February 2020

Tuesday 03, 03 2020
In the first two months of 2020, there were 17.4 thousand newly established enterprises, up 9.1% over the same period in 2019

1. Industrial production

​Industrial production in February 2020 was estimated to increase significantly compared to the previous month and over the same period last year due to the bigger number of production days. However, the Covid-19 epidemic had a fairly strong negative impact on industrial production activities, so in the first 2 months of 2020, the Index of Industrial Production (IIP) increased by only 6.2% compared to the same period last year, much lower than the 13.7% increase in the same period in 2018 and 9.2% in the same period in 2019.

In particular, the IIP in February 2020 was estimated to increase by 8.4% compared to last month and up 23.7% over the same period last year, of which mining increased by 9.2%; processing and manufacturing industry increased by 26.4%; electricity production and distribution increased by 22.5%; water supply and waste treatment increased by 8.3%.

Industrial production

2. Business registration

In the first two months of 2020, there were 17.4 thousand newly established enterprises, up 9.1% over the same period in 2019; and there were 11.9 thousand enterprises returning to operation, up 17.1%. Notably, there were nearly 16.2 thousand enterprises temporarily suspending operation within 2 months, up 19.5% compared to the same period last year.

In February alone, there were 9,163 newly established businesses with a total registered capital of VND 96.8 trillion and the number of registered employees was nearly 73.1 thousand, which were an increase of 10.7% in the number of enterprises, a decrease of 21.4% in registered capital and a decrease of 13.5% in the number of employees compared to January 2020.

Average registered capital of newly established enterprises reached VND 10.6 billion, down 29% from the previous month and down 35.2% over the same period last year. Remarkably, there was a newly established enterprise with registered capital of VND 144 trillion (6.3 billion USD), equivalent to more than 53% of the total registered capital in January.

According to Vietnamese law, shareholders must contribute capital within 90 days. However, many businesses do not contribute enough capital registered during that time, and it is likely that this business will also be among them.

Business registration

3. Investment

Realized investment capital from the State budget in February, 2020 was estimated to reach VND 18.1 trillion, up 28.7% over the same period last year. As of February 20, 2020, total foreign investment in Vietnam including newly registered capital, adjusted registered capital, and capital contribution and share purchase of foreign investors reached nearly USD 6.5 billion, down 23.6% over the same period in 2019.

Of which, 500 new projects were licensed with a registered capital of USD 5 billion, down 2.7% in the number of projects and up 104.7% in registered capital as compared to the same period last year.

Investment

4. Retail sales of consumer goods and services

Total retail sales of consumer goods and services in February were estimated at VND 414.1 trillion, down 7.9% over the previous month and up 6% over the same period last year, of which: Revenue retail sales of goods reached VND 325.2 trillion; that of accommodation revenue, catering services reached VND 44.2 trillion; tourism revenue reached VND 3.3 trillion; other service revenue reached VND 41.4 trillion VND.

For the first 2 months of 2020, total retail sales of goods and consumer services reached VND 863.9 trillion, up 8.3% over the same period last year, if excluding the price factor, the figure would be 5,4%.

Retail sales of consumer goods and services

5. Imports & exports of goods

Total import and export turnover of goods in the first 2 months of 2020 was estimated at USD 74 billion, up 2.4% over the same period last year. Export turnover in February 2020 was estimated at USD 18.6 billion, up 1.5% against the previous month, of which the domestic economic sector contributed USD 5.1 billion, down 19.6%;

FDI sector (including crude oil) contributed USD 13.5 billion, up 12.6%. Compared to the same period last year, export turnover in February 2020 increased by 34%, of which the domestic economic sector increased by 39.7%; and foreign invested sector (including crude oil) increased by 32%. Import turnover in February 2020 was estimated at USD 18.50 billion, down 0.5% against the previous month, of which the domestic economic sector contributed USD 7.45 billion, down 5.7%; FDI sector contributed USD 11.05 billion, up 3.3%.

Compared to the same period last year, import turnover in February 2020 was estimated to increase by 26%, of which the domestic economic sector increased by 29.7%; and FDI sector increased by 23.7%.

Imports & exports of goods

6. Consumer price index and inflation

The consumer price index in February 2020 decreased by 0.17% compared to the previous month, mainly due to the reduction of consumer demand for goods and services after the Lunar New Year. Covid-19 made travel, hotel, and entertainment service prices decrease; and gasoline prices were also adjusted to decrease.

However, the consumer price index in February and the average of the first 2 months of 2020 compared to the same period last year (up 5.4% and 5.91%) were of the highest increase in the last 7 years. Core inflation in February 2020 increased by 0.17% over the previous month and by 2.94% over the same period last year.

The average core inflation in the first 2 months of this year increased by 3.1% compared to the same period in 2019.

Consumer price index and inflation

>> Vietnam’s economic overview in January 2020

Source: GSO

Categories
Economy News

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