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Vietnam’s economic overview in Q12020

Wednesday 01, 04 2020
Vietnam’s economic overview in Q12020

1. GDP growth

Gross domestic product (GDP) in the first quarter of 2020 was estimated to increase by 3.82% over the same period last year, which is the lowest first quarter’s GDP growth rate in the period of 2011-2020. In the overall growth of the economy, agriculture, forestry and fishery sector increased by 0.08%, contributing 0.2% to the overall growth rate; industry and construction sector increased by 5.15%, contributing 58.4%; service sector increased by 3.27%, contributing 41.4%.

2. Industrial production

In the first quarter of 2020, Index of Industrial Production (IIP) was estimated to increase 5.28% over the same period last year. In which, processing and manufacturing industry increased by 7.12%, contributing 1.64 percentage points to the overall growth of the whole economy; power production and distribution increased by 7.46%, contributing 0.41 percentage points; water supply and waste treatment increased by 6.67%, contributing 0.05 percentage points; mining sector fell by 3.18% due to the sharp decline in crude oil and natural gas, contributing -0.21 percentage points.

Index of Industrial Production (IIP)

3. Business registration

In March 2020, there were 12,272 newly established enterprises with total registered capital of VND 131.4 trillion and registered employees of 86.2 thousand, an increase of 33.9%, 35.7% and 17.9% respectively over February.

The average registered capital of a newly established enterprise is VND 10.7 billion, up 1.3% from the previous month and 4.2% over the same period last year. There were 3,423 businesses returning to operation, a decrease of 5.7% over the previous month and 29.8% over the same period last year.

Generally, for the first quarter of 2020, there were 29.7 thousand newly registered enterprises with total registered capital of VND 351.4 trillion and total registered employees of 243.7 thousand, an increase of 4.4% in the number of enterprises, a decrease of 6.4% in registered capital and 23.3% in the number of employees compared to the same period last year.

The average registered capital of a newly established enterprise in the first quarter of 2020 was VND 11.8 billion, down 10.4% over the same period last year.

Business registration

4. Investment

Total realized investment capital in the first quarter of 2020 increased by 2.2% over the same period in 2019, which is the lowest increase in the period 2016-2020 due to the negative impact of Covid-19 epidemic on all production and business activities.

Realized investment capital from the State budget in the first quarter of 2020 reached 13.2% of the annual plan. As of March 20, 2020, total foreign investment in Vietnam including newly registered capital, adjusted capital and capital contribution and share purchase of foreign investors reached nearly USD 8.6 billion, down 20.9% over the same period last year.

In which, there were 758 newly licensed projects with registered capital of USD 5.5 billion, a decrease of 3.4% in the number of projects and an increase of 44.8% in the registered capital against the same period last year.

Realized FDI capital in the first quarter of 2020 was estimated at USD 3.9 billion, down 6.6% over the same period last year, of which FDI into manufacturing and processing industry reached USD 2.8 billion, accounting for 73.7% of the total realized FDI capital; real estate business activities reached USD 405.4 million, accounting for 10.5%; production and distribution of electricity, gas, hot water, steam and air conditioning reached USD 337.7 million, accounting for 8.8%.

Investment

5. Retail sales of consumer goods and services

The negative impact of the Covid-19 epidemic caused consumers to go shopping in public places, travel and dining outside the family less often, so the total estimated retail sales of consumer goods and services in March was only VND 390 trillion, a decrease of 4% over the previous month and 0.8% over the same period last year.

In particular, retail sales of goods reached VND 316.1 trillion, of accommodation and food services reached VND 33.9 trillion, of tourism reached VND 1.3 trillion, and of other services reached VND 38.7 trillion. For the first quarter of 2020, total retail sales of consumer goods and services reached VND 1,246.1 trillion, an increase of 4.7% compared to the same period last year, if excluding the price factor, the increase would be 1.6 % (that in the same period in 2019 increased by 9.3%).

Notably, due to the suspension of many tourist attractions, and several domestic and international tourists canceling their tours due to Covid-19, tourism revenue in the first quarter was estimated at only VND 7.8 trillion, accounting for 0.6% of the total and decreasing 27.8% over the same period last year.

Retail sales of consumer goods and services

6. Imports & exports of goods

The Covid-19 epidemic spreading strongly among major trade partners of Vietnam such as China, Korea, Japan, EU and the United States has greatly affected the import and export turnover of many commodities.

In March, total import and export turnovers were estimated at USD 39 billion, down 11.1% over the same period last year. Generally, for the first quarter, total import and export turnovers of goods reached USD 115.34 billion, down 0.7%. Export turnover in March 2020 was estimated at USD 20 billion, down 4.1% over the previous month, of which the domestic economic sector contributed USD 6.16 billion and FDI sector (including crude oil) contributed USD 13.84 billion.

In March, most of export products saw a decrease in export turnover over the previous month: exports of crude oil decreased by 20.8%; iron and steel decreased by 20.3%; textiles decreased by 19.4%; footwear decreased by 19.1%. Compared to the same period last year, export turnover of goods in March decreased by 12.1%, of which the domestic economic sector decreased by 3.7% while the FDI sector (including crude oil) decreased by 15.4%.

For the first quarter of 2020, total export turnover was estimated at USD 59.08 billion, an increase of 0.5% over the same period last year. Import turnover was estimated at USD 19 billion, up 2.3% over the previous month, of which the domestic economic sector contributed USD 7.7 billion and FDI sector contributed USD 11.3 billion.

Import turnover of some items increased over the previous month: telephones and components increased by 17%; cloth increased by 12.8%; machinery, equipment, tools and spare parts increased by 7.9%; electronics, computers and components increased by 1%.

Compared to the same period last year, imports of goods in March decreased by 10.1%, of which the domestic economic sector decreased by 14% and FDI sector decreased by 7.2%. For the first quarter of 2020, import turnover was estimated at USD 56.26 billion, a decrease of 1.9% compared to the same period last year.

Imports & exports of goods

7. Consumer price index and inflation

The sharp drop in world gasoline prices and the abundant supply of poultry are the main reasons for the consumer price index (CPI) in March to fall by 0.72% compared to the previous month, which is the lowest CPI in 2016-2020 period.

However, the consumer price index in March and in the first quarter of 2020 yoy were the highest in the period 2016-2020, increasing by 4.87% and 5.56% respectively. Core inflation in March 2020 decreased by 0.06% over the previous month and increased by 2.95% over the same period last year.

​The average core inflation in the first quarter of 2020 increased by 3.05% compared to the same period last year.

Consumer price index and inflation

​Source: GSO

Categories:
Economy News

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