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Vietnam’s economic overview (July, 2021)

Vietnam’s economic overview (July, 2021)

Saturday 31, 07 2021
Vietnam is experiencing the largest Covid-19 outbreak to date. This has had a significant negative impact on the social and economic development of this country.

Covid-19

1. Production of agriculture, forestry and fisheries

a) Agriculture production

As of July 15, 1,099.6 thousand hectares of rice for winter crop had been cultivated, equaling 99.4% of the same period last year.

At the same time, 738 thousand hectares of maize had also been planted, equaling 101.8% of the same period last year; the figure for sweet potatoes was 74.8 thousand hectares, equaling 92.5%; the figure for peanuts was 147.5 thousand hectares, equaling 95.5%; the figure for soyment was 23.5 thousand hectares,

Skin inflammation has been raging so there are many difficulties in raising buffaloes and cows. It is estimated that by the end of July, the total number of buffaloes in Vietnam would decrease by 3.3% compared to the same period in 2020; that of cows increased by 2.3% while the figures for pigs and poultry increased by 6.1% and 4.8%, respectively.

Agriculture

b) Forestry production

In July, the area for newly planted forest was estimated at 13.1 thousand hectares, an increase of 3.3% over the same period last year.

For the first 7 months of the year, the area for newly planted forest reached 123.6 thousand hectares, an increase of 3.2% over the same period last year. The number of planted trees reached 51.9 million, up 1.9%. The amount of wood output reached 9,495.6 thousand m3, up 5.5% while that of firewood output reached 11.4 million steres, decreasing by 0.3%.

The area of damaged forest in July was 418.5 hectares. Generally, in the first 7 months of the year, there were 1,398.3 ha of damaged forest, an increase of 42.3% over the same period last year. In particular, the burnt forest area was 629.3 ha, an increase of 40.5% while the area of deforested was 769 ha, up 43.8%.

Forestry

c) Fisheries production

Fishery production was estimated at 804.1 thousand tons, decreasing by 0.3% over the same period last year. Generally, for the first 7 months of 2021, the output of aquatic products was estimated at 4,900.1 thousand tons, up 2.2% over the same period last year. In particular, aquaculture production reached 2.552.9 thousand tons, increasing by 3.3%.

Fishery

2. Industrial production

The index of industrial production (IIP) in July 2021 was estimated to increase by 1.8% over the previous month and by 2.2% over the same period last year. In particular, IPP of the mining industry decreased by 8%; processing and manufacturing increased by 2.9%; electricity production and distribution increased by 6.7%; water supply, waste and wastewater treatment and management activities increased by 4.4%.

Industrial

For the first 7 months of 2021, IIP is estimated to increase by 7.9% over the same period last year, much higher than the 2.6% increase in the same period in 2020. Specifically, the processing and manufacturing industry increased by 9.9%, contributing 8.1 percentage points to the overall growth; electricity production and distribution increased by 8.2%, contributing 0.7 percentage points; water supply, waste and wastewater treatment and management activities increased by 5.6%, contributing 0.1 percentage points; while the mining industry decreased by 6.3%, contributing minus 1 percentage point in the overall growth.

3. Business registration

Due to the complicated development of the Covid-19 epidemic, the number of infections is increasing. In addition, social distancing has been implemented. These all have had negative effect on business registration of enterprises in July and and the first 7 months of the year.

In July 2021, there were 8,740 newly established enterprises with the total registered capital of nearly 122.8 trillion VND and the number of registered employees of 71.2 thousand people. This depicts a decrease of 22.8% in the number of enterprises, 25.3% in registered capital and 0.9% in number of employees compared to June 2021. The average registered capital of a newly established enterprise reached 14 billion VND, down 3.3% from the previous month and 22.5% over the same period last year.

Business

For the first seven months of 2021, there were 75.8 thousand newly registered enterprises with a total registered capital of 1065.4 trillion VND and a total registered labor force of 555.5 thousand employees, which is an increase of 0.8% in the number of enterprises, 13.8% in the registered capital and a decrease of 7.2% in the number of employees over the same period last year. The average registered capital of a newly established enterprise reached 14.1 billion VND, up 12.9% over the same period last year.

Over the same period, there were nearly 79.7 thousand enterprises suspending business temporarily, waiting for dissolution procedures and completing dissolution procedures, an increase of 25.5% over the same period last year. On average, nearly 11.4 thousand businesses withdraw from the market every month.

4. Investment

In July, the total realized investment capital from the State budget was estimated at 38.3 trillion VND, down 12.4% over the same period last year. In the first 7 months of 2021, investment capital realized from the State budget reached 210.8 trillion VND, equaling 44.3% of the year plan and increasing by 5.6% over the same period last year.

Investment

As of July 20, the total registered foreign investment capital in Vietnam, including newly registered capital, adjusted registered capital and capital contribution and share purchase by foreign investors, reached 16.72 billion USD, down 11.1% over the same period last year. Realized foreign direct investment in Vietnam in the first seven months of 2021 is estimated at 10.5 billion USD, up 3.8% over the same period last year.

5. Trade

Total retail sales of consumer goods and services in July was estimated at 339.4 trillion VND, a decrease of 8.3% from the previous month and 19.8% from the same period last year. Generally for the first seven months of 2021, the total retail sales of consumer goods and services reached 2,791.3 trillion VND, up 0.7% over the same period last year.

Retail

It is estimated that in July 2021, the export turnover of goods reached 27 billion USD, down 0.8% from the previous month and up 8.4% over the same period last year. Generally, for the first seven months of 2021, export turnover of goods was estimated at 185.33 billion USD, up 25.5% over the same period last year. There were 27 items with export turnover of over 1 billion USD, accounting for 90.2% of total export turnover.

Regarding the export structure, export value of fuels and minerals was estimated at 1.87 billion USD, up 1.4% over the same period last year; that of processed industrial products was estimated at 164.89 billion USD, up 27.1%; export turnover of agricultural and forestry products reached 13.65 billion USD, up 16.7%; and the figure for seafood products reached 4.92 billion USD, up 12%.

The United States is Vietnam's largest export market with a turnover of 53.6 billion USD, up 37.4% over the same period last year. Following is China with 28.7 billion USD, up 24.2%; the EU market with 22.5 billion USD, up 15.5%; the ASEAN market with 16.1 billion USD, up 25.9%; Korea with 12 billion USD, up 10.3%, and Japan with 11.7 billion USD, up 8.3%.

In July 2021, the import turnover of goods reached 28.7 billion USD, up 3.8% over the previous month and 29.9% over the same period last year. In general, for the first seven months of 2021, the import turnover of goods was estimated at 188.03 billion USD, up 35.3% over the same period last year.

Import & Export

Import turnover of materials for production was estimated at 176.36 billion USD, accounting for the largest proportion and increasing by 35.8% over the same period last year. That of consumer goods was estimated at 11.67 billion USD, up 28.5%.

China is Vietnam's largest import market with a turnover of 62.3 billion USD, up 48.5% over the same period last year, followed by the Korean market with 29.7 billion USD, up 19.9%; the ASEAN market with 24.7 billion USD, up 48.2%; Japan with 12.6 billion USD, up 13.8%; the EU market with 9.7 billion USD, up 19.6%; and the United States with 8.9 billion USD, up 10.4%.

In July, Vietnam saw a trade deficit of 1.7 billion USD, and in the first 7 months of 2021, the country had a trade deficit of 2.7 billion USD while in the same period last year, there was a trade surplus of 8.69 billion USD.

6. Consumer price index and inflation

Prices of food in cities and provinces implementing social distancing have increased because people are worried about the lack of goods. In addition, petrol and gas prices have also increase in line with the world fuel prices. These are the main reasons for the increase in the consumer price index (CPI) in July 2021.

The CPI in July 2021 increased by 0.62% over the previous month. Average CPI in the first 7 months of 2021 increased by 1.64% compared to that of the same period in 2020. CPI in July increased by 2.25% over December 2020 and by 2.64% over the same period last year.

July’s core inflation increased by 0.06% over the previous month and by 0.99% over the same period last year. Average core inflation in the first 7 months of this year increased by 0.89% compared to that of the same period in 2020.

Source: GSO

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