The complicated and unpredictable developments of the respiratory disease caused by the new coronavirus, known as Covid-19, are presenting numerous challenges to the realisation of Vietnam’s socio-economic targets in 2020, given its far-reaching impacts on all aspects.


Manufacturing motorbike parts at Cosmos Industrial Co. Ltd in Vinh Phuc Province (Photo: Tuan Tu)

 

The Vietnamese government has yet to revise its growth target but is calling for quick responses to transform challenges into opportunities to build a self-reliant economy resilient to external impacts.

updated growth scenarios

Weighing the expected impacts of the Covid-19 epidemic on Vietnam’s economy, the Ministry of Planning and Investment (MPI) has updated its economic growth scenarios for 2020 and proposed measures in accordance with its projections.

In the first scenario, when the epidemic is contained in the first quarter, GDP growth is projected at 6.25%, down 0.55 percentage points from the government’s target, with inflation forecast at 3.96%. If the epidemic drags into and is contained within the second quarter, growth is projected at 5.96% while inflation is 4.86%.

In both scenarios, exports will fall by more than 8% and imports over 3%. Enterprises are worried that if the supply of input materials and export markets do not improve soon, they can only sustain production until the end of February, the MPI emphasises.

With a stance of not changing the growth target, the MPI has proposed a group of measures that needs to be implemented immediately and aggressively, with the most important being containing the epidemic, along with measures to stabilise people’s lives and remove difficulties facing enterprises in maintaining their business during the epidemic.

Specifically, the State Bank of Vietnam is tasked with designing credit packages for small and medium-sized enterprises (SMEs), cooperatives and household farmers affected by the epidemic; and asking commercial banks to reduce interest rates and extend debt repayment dates. Meanwhile, the Ministry of Finance is assigned with devising tax policies to support SMEs, logistics, retail, manufacturing, agricultural processing, tourism and service businesses.

Long-term measures

According to experts, weaknesses in the Vietnamese economy, especially its resilience to major external impacts, will be exposed after this difficult period. They believe that Vietnam can still overcome the challenges by stepping up economic restructuring in both the short term and the long term.

Senior economist Nguyen Anh Duong at the Central Institute of Economic Management said Vietnam already has experience in dealing effectively with adverse external impacts and disease outbreaks. The most important thing is a calm attitude in order to make appropriate decisions. Amid the rapid and complicated developments of Covid-19, the government and ministries are watching the situation closely in order to introduce well-judged measures.

According to economist Can Van Luc, it is first necessary to seriously implement directives on preventing the epidemic while each ministry and enterprise need to assess the impacts on their fields in order to take appropriate measures. Furthermore, it is necessary to increase international cooperation, provide accurate, timely and transparent information while severely punishing those spreading fake news that causes public panic.

Experts have said that this difficulty requires Vietnam to consider long-term measures, accelerating economic restructuring so as to reduce excessive reliance on a market or region. Duong said in the past Vietnam tried to increase exports at all costs but now the country needs to pay more attention to the export structure, the sustainability of added value and the position of Vietnamese enterprises in the value chains.

These issues are not new and can only be addressed by consistent measures in their overall plans. Vietnam’s export activity has seen certain shifts since 2019, especially amid the US-China trade tensions and relatively positive pressure from the implementation of the CPTPP.The Covid-19 has led to far-reaching impacts on many enterprises and the people but it also forces Vietnam to seriously consider the export structure and markets. Only by taking this approach can Vietnam ensure sustainable trade growth in terms of revenues, added value and competitiveness of enterprises.

According to Director of the General Statistics Office Nguyen Bich Lam, looking for new markets so as not to depend on the Chinese market for both inputs and exports is an urgent matter. When implementing the EU-Vietnam Free Trade Agreement, tariffs on 71% of Vietnamese exports to the EU will be eliminated with the condition that the input materials must be sourced domestically or from countries with trade agreements with the EU. Vietnamese exports using materials from China will not qualify for tariff elimination, therefore it is necessary to reduce the use of materials imported from China.

 Source: NDO

Related Topics


Rich and Flavorful Honey of Dao Village

Dao Village’s honey – a product certified with a 3-star OCOP (One Commune One Product) rating by Thong Nhat Agricultural Cooperative in Dao Village (Hoa Binh City) – is highly regarded by consumers for its quality, richness, and variety in packaging. The distinctively sweet taste of Dao Village’s honey leaves a lasting impression on anyone who has tried it.

Lac Thuy district prioritises resources for industrial, handicraft development

In alignment with Project No. 07-DA/TU, issued by the Hoa Binh provincial Party Committee on November 1, 2021, Lac Thuy district has actively promoted investment and supported the sustainable development of its industrial and handicraft sectors during the 2021–2025 period. Alongside this, the district has remained committed to preserving and revitalising traditional craft villages.

Phu Thanh implements organic practices in tea production

Located in the northern part of Lac Thuy district, with a temperate climate and fertile soil, Phu Thanh commune has great potential and advantages in growing tea. The long-standing experience, combined with strict adherence to organic farming practices in the tea gardens, ensures that the dried tea products from Phu Thanh and Lac Thuy as a whole are sold out immediately upon production, providing a stable and prosperous life for the local people.

Hoa Binh works hard to accelerate progress of key projects

Amid efforts to streamline the administrative apparatus, Hoa Binh province has intensified measures to address challenges in land clearance, resettlement support, and infrastructure investment, aiming to speed up the progress of key projects.

Hoa Binh achieves record-breaking economic growth in Q1

Hoa Binh province has posted an unprecedented economic growth rate of 12.76% in the first quarter of 2025, marking its highest quarterly performance to date and positioning it as the second fastest-growing locality in the country, trailing only Bac Giang province.

Hoa Binh focuses on building strong OCOP brands for sustainable growth

Under current regulations, products in the One Commune – One Product (OCOP) programme that are rated three stars or higher must undergo re-evaluation every three months. However, in reality, some of these products fail to consistently meet the required standards, raising concerns about the sustainability of their OCOP certification. This underscores the urgent need for producers to enhance product quality and gradually develop their OCOP products into strong, marketable brands.