What will happen for VN if Samsung lowers export turnover goal by $5.8 billion

In Vietnam, Samsung has been making a great contribution to the country’s GDP over the last many years.

A ministry report to the Prime Minister about the possible impact that Covid-19 may have on key industries shows that electronics manufacturing will bear serious impact in the following quarters of the year because of decline in demand from the American and European markets.

What will happen for VN if Samsung lowers export turnover goal by $5.8 billion



The ministry said Samsung’s global revenue and output is predicted to decrease by $5.8 billion to $45.5 billion this year.

In Vietnam, Samsung has been making a great contribution to the country’s GDP over the last many years. Of the GDP value of $220 billion in 2017, $60 billion came from Samsung.

Nguyen Van Nam, former director of the Trade Research Institute, said the decrease is foreseeable, and not only Samsung but the whole economy will be affected by Covid-19.

A ministry report to the Prime Minister about the possible impact that Covid-19 may have on key industries shows that electronics manufacturing will bear serious impact in the following quarters of the year because of decline in demand from the American and European markets.

In the most optimistic scenario, Vietnam’s GDP will grow by 4.8 percent in 2020, far below the target of 6.8 percent.


Asked what Vietnam should do now to minimize the adverse impact, Nam said state agencies need to identify products that have haf the sharpest decrease in production output and exports, and thr reasons behind the decreases (lack of input materials, lack of capital, or low demand).

The analyses will help the government understand which products Vietnam should focus on to obtain the highest possible growth rate.

Rice, for instance, is one of a few products which still can sell well. Some other countries have cut export volumes for their food security policy.

 

Rice production is a great advantage of Vietnam, which hasn’t had severe impacts from the epidemic. Vietnam can gather strength on producing and exporting rice to offset the decreases in other sectors.

Vietnam, which has gained initial encouraging results in the fight against Covid-19, can provide products needed all over the world. Textile and garment companies, for example, can shift to make face masks that meet international standards.

Nam emphasisef the cooperation between the state and enterprises. The state, in addition to support in capital, tax reduction and debt rescheduling, also needs to help businesses survey markets.

Samsung Vietnam’s decision to lower the targeted export turnover in 2020 will affect Vietnam’s export targets and GDP growth. Nam stressed the task of easing reliance on foreign invested enterprises. However, he said this is a long-term strategy and cannot be obtained overnight.

Thoi Bao Kinh Te Sai Gon reported that Vietnam’s foreign trade in the first two months of the year picked up by 2.4 percent year-on-year to reach $74 billion. 

Kim Chi

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