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Vietnam’s four-month economic overview (April 2020)

Vietnam’s four-month economic overview (April 2020)

Monday 04, 05 2020

1. Agricultural, forestry and fishery production

Vietnam’s agricultural, forestry and fishery production in April 2020 faced difficulties caused by drought and saline intrusion affecting cultivation and aquaculture. African hog cholera has been controlled but the rate of re-herd is low. In addition, the Covid-19 epidemic evolved complicatedly, directly affecting the production, consumption, export and import of agricultural products. Output of wood and aquatic products in April also decreased over the same period last year.

2. Industrial production

April’s Index of Industrial Production (IIP) is estimated to decrease by 13.3% over the previous month and by 10.5% over the same period last year, of which mining industry decreased by 10.7%; processing and manufacturing industry decreased by 11.3%; electricity production and distribution fell 6.9%; while water supply, sewerage, waste management increased by 2%.

For the first 4 months, IIP is estimated to increase by 1.8% over the same period last year. In which, processing and manufacturing increased by 3%, contributing 2.5 percentage points to the general growth; power production and distribution increased by 2.9%, contributing 0.3 percentage points; water supply, sewerage, waste management increased by 3.6%, contributed 0.1 percentage points; mining fell by 6.8%, contributing -1.1 percentage points.

April’s Index of Industrial Production (IIP)

3. Business registration

In April 2020, there were 7,885 newly established enterprises with a total registered capital of VND 93.9 trillion and the number of registered employees was 72 thousand, which means there were a decrease of 35.7% in the number of enterprises, a decrease of 28.6% in registered capital and a decrease of 16.4% in the number of employees compared to March 2020. Average registered capital per newly established enterprise in April was VND 11.9 billion, up 11.2% over the previous month and 5.9% over the same period in 2019. There were 3,810 enterprises returning to operation.

Generally, in the first four months of the year, there were 37.6 thousand newly established enterprises with a total registered capital of VND 445.2 trillion and a total registered labor of 315.7 thousand employees, equivalent to a decrease of 13.2%, 17.9% and 29.7% in the number of enterprises, registered capital and number of employees respectively compared to the same period last year. The average registered capital of a newly established enterprise in 4 months was VND 11.8 billion, down 5.5% compared to the same period last year.

Business registration

4. Investment

The complicated development of Covid-19 epidemic has affected the progress of construction projects. Realized investment capital from the state budget in April 2020 was estimated at VND 23.2 trillion, an increase of 0.8% over the same period last year. Generally, in the first 4 months, investment capital from the state budget reached VND 83.7 trillion, reaching 18.1% of the year plan and increasing 12.9% over the same period last.

Total foreign investment capital in Vietnam as of April 20, 2020, including newly registered capital, adjusted capital and capital contribution and share purchase of foreign investors had reached USD 12.3 billion, falling by 15.5% against same period last year. Of which, 984 projects were newly licensed with a total registered capital of USD 6.8 billion, down 9.1% in the number of projects and up 26.9% in the registered capital against the same period last year.

Investment

5. Retail sales of consumer goods and services

The Covid-19 epidemic has had a negative impact on the trade and service activities in April. Shopping activities and consumer spending dropped sharply. and many accommodation, eating and travel establishments had to temporarily stop operation to maintain social distance.

Total retail sales of consumer goods and services in April were estimated at VND 293.9 trillion, down 20.5% over the previous month and 26% over the same period last year, of which: retail sales of goods reached VND 257.4 trillion, decreasing 13.4% and 15.3% respectively; accommodation and food services revenue reached VND 16.8 trillion, decreasing 50.4% and 64.7% respectively; tourism revenue reached VND 88 billion, down 93.2% and 97.5% respectively; other service revenue reached VND 19.6 trillion, down 47.2% and 53.3% respectively.

For the first 4 months of 2020, total retail sales of goods and consumer services reached VND 1,520 trillion, decreasing 4.3% compared to the same period last year. If excluding the price factor, the figure would be 9.6%.

Retail sales of consumer goods and services

6. Imports & exports of goods

Generally, in the first 4 months of 2020, total import and export turnover was estimated at USD 162.83 billion USD, up 3.4% over the same period last year. In particular, export turnover in April 2020 was estimated at USD 19.7 billion, a decrease of 18.4% over the previous month, to which the domestic economic sector contributed USD 6.35 billion, down 16.7% while FDI sector (including crude oil) contributed USD 13.35 billion, down 19.1%. Compared to the same period last year, export turnover in April 2020 decreased by 3.5%. From the beginning of the year to April 2020, export turnover was estimated at USD 82.94 billion.

Import turnover in April 2020 was estimated at USD 20.4 billion, down 7.9% against the previous month, to which the domestic economic sector contributed USD 8.9 billion and FDI sector contributed USD 11.5 billion. Compared to the same period last year, import turnover in April 2020 decreased by 2.3. In the first 4 months, import turnover was estimated at USD 79.89 billion, up 2.1% over the same period last year.

Imports & exports of goods

7. Consumer price index and inflation

The consumer price index in April 2020 decreased by 1.54% compared to the previous month, which is the lowest level in the period of 2016-2020. The reason behind this is because many countries around the world have applied lockdown and social distancing to prevent the spread of the Covid-19 virus, which has caused a sharp drop in gasoline prices. Additionally, when Vietnamese people followed the Prime Minister's Directive No. 16 / CT-TTg to control Covid-19 epidemic, prices of many non-food and foodstuffs also decreased. However, the average consumer price index in the first 4 months of 2020 increased by 4.9% compared to the same period last year - the highest increase in the period 2016-2020.

Core inflation in April 2020 decreased by 0.15% over the previous month and increased by 2.71% over the same period last year. The average core inflation in the first 4 months of this year increased by 2.96% compared to the same period in 2019.

Consumer price index and inflation

​>> Vietnam’s economic overview in Q12020

Source: GSO

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Vietnam Economy

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