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Vietnam's macroeconomics situation after the COVID-19 pandemic

Monday 22, 06 2020
With good control of the COVID-19 pandemic, macroeconomics in Vietnam is assessed to be stable in the first two quarters of 2020.
Vietnam's macroeconomics situation after the COVID-19 pandemic
  • Many provinces and cities are determined to strive to exceed the plan set in early 2020

In May 2020, the Government and the Prime Minister held meetings and worked with businesses, localities, and key economic regions to promptly remove difficulties and obstacles in production and business. ; attract investment and promote economic growth. At the same time, the Government and the Prime Minister also issued many mechanisms and policies such as Resolution No. 68 on the Program to cut and simplify regulations related to business activities in the period of 2020 - 2025 and recently is Resolution No. 84 on tasks and solutions continues to remove difficulties for production and business, promotes disbursement of public investment and ensures social order and safety in the context of the COVID-19 pandemic.

Determining early control of the disease as a golden opportunity and very important for Vietnam to rise up in the context of the world's many difficulties, the Government and the Prime Minister have directed with the spirit of not afraid of difficulties, always innovation in operating, overcoming supply chain faults, actively attracting development investment, both domestically and internationally.

Immediately after the relaxation of societies, under the leadership of the Party and the government, business communities and people in the provinces & cities were excited to return to work. The socio-economic situation as of the beginning of June 2020 has had many positive changes: large tourist centers to welcome a large number of domestic tourists, airlines have returned to bustling activity. Moreover, many provinces and cities have very high determination in development, striving to complete comprehensively, exceeding the State plan for 2020.

In June 2020, there were 10,700 newly established enterprises, an increase of 36.1% compared to May, the number of enterprises returning to operation increased by 10.5%; the number of enterprises suspending operation pending dissolution procedures decreased by 14.5% and the number of enterprises completing dissolution procedures decreased by 4.8%.

Vietnam's macroeconomics situation after the COVID-19 pandemic

International visitors to our country plummeted due to the fact that they have not been opened to international tourism, so the number of tourists coming in the month is mainly foreign experts and technicians. Generally for the first 6 months of this year, international visitors to Vietnam reached 3.7 million, down 48.8%.

Outstanding in socio-economic development in June and the first 6 months of the year, macroeconomic continued to be stable. Operating interest rates decreased, monetary policy was implemented flexibly and proactively. Consumer price index (CPI) in May 2020 decreased by 0.03% over the previous month, for the whole 6 months, the average CPI increased by 4.39% over the same period.

The money market, basic credit is stable, the foreign exchange market operates efficiently and smoothly. As of June 10th, capital mobilization increased by 1.85%, credit increased by 1.32% compared to the end of 2019. In June, the State Bank continued to adjust the 2nd rate of the executive interest rate, deposit interest rate ceiling, and lending interest rate ceiling for other sectors to share difficulties with businesses.

Vietnam's stock market has been more active thanks to the situation of domestic control of COVID-19 pandemic, production, and business activities that have established a new normal state.

Agricultural production showed signs of recovery but slowly (winter-spring rice yield increased by 0.3 quintals/ha). Notably, over the past time, our pig raising has been greatly affected by the disease. The Ministry of Agriculture and Rural Development has made great efforts to rebuild but the price of pork is still high despite the government's many measures. The Prime Minister stated that the point is to solve the radical and problematic problem of the high price of pork but also avoid the time when pork price drops, damaging the interests of pig farmers, adversely affecting the sustainable development of the livestock industry. Launching the re-herd based on the control of African swine cholera, encouraging large-scale investment, application of modern technology, especially resolving input, breed, feed, combined with import to keep pork prices stable.

Commercial activities and services increased sharply again, due to the normal life after the social gap, along with the holiday on 30/4-1/5, so the activities of purchasing goods and consumption of people There are signs of a fairly good increase (total retail sales of consumer goods and services in June 2020 increased by 26.9% over the previous month). Notably, the airlines and the tourism industry suffered heavily because COVID-19 has returned to the relatively busy operation, the major tourist centers welcomed a large number of domestic tourists.

Implementation of support for people facing difficulties due to the COVID-19 pandemic has been actively deployed throughout the country. Up to now, the total amount paid to support the subjects is VND 17.5 trillion (excluding unemployment insurance payment of VND 2,000 billion). Many localities have provided more support than Resolution No. 42 and Decision No. 15. So far, basically, policy beneficiaries and people with meritorious services have all received support. The group of workers who are unemployed and temporarily laid-off workers is also completing the procedures to support by local authorities.

  • Ensuring credit quality for capital support for businesses

After the pandemic occurred, the State Bank instructed the whole sector to deploy as soon and quickly as possible to support and remove difficulties for people and businesses affected by the Covid-19 epidemic. However, the banking industry also thoroughly grasped the views, removed difficulties but did not lower credit standards in lending. During the implementation of Circular 01/2020 / TT-NHNN dated March 13, 2020, the SBV directed credit institutions to create conditions for businesses to extend their due debts and interests and are considering the difficulties of businesses to adjust and create more favorable conditions for capital disbursement, capital support for businesses.

Currently, with businesses having effective projects, the credit institutions are very active disbursements. Businesses that do not need loans yet are allowed to extend and delay repaying their old debts in a reasonable manner to reduce difficulties for enterprises. Therefore, the current capital support for businesses along with ensuring credit quality must always be parallel.

The declaration and verification of the identity of the e-wallet owner are to ensure safety for users of e-wallet services, because in recent times, some e-wallet users have disclosed information, affect your account security. According to the State Bank, through practical information, to ensure the safety of electronic wallets connected to bank accounts, debit cards need to be declared. After making the declaration, payment intermediaries are responsible for preserving customer information in accordance with the law. All these provisions are implemented in accordance with Circular 23 amending and supplementing Circular 39 2014.

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Vietnam’s macroeconomics overview 2020

Complied by Vietnam Credit

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