Vietnam: the rare economy that still grew during Covid-19 pandemic

Vietnam’s GDP grew by 2.12 percent in the first nine months of the year compared with the same period last year, the lowest growth rate since 2011, according to the General Statistics Offic.

The 2.12 percent growth rate came following the 3.68 percent rate in Q1, 0.39 percent in Q2, and 2.62 percent in Q3. This is the lowest 9-month growth rate in the 2011-2020 period.

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However, the low growth rate is still very encouraging in the context of Covid-19 which has seriously hit all economies globally.

What is noteworthy is that Vietnam obtained a growth rate of 2.62 percent in Q3. This shows that Covid-19 has been controlled in the country and the economy has entered the ‘new normal' period.

Agricultural production, forestry and seafood grew by 1.84 percent, making up 13.62 percent of total growth, while industry and construction grew by 3.08 percent, contributing 58.35 percent to the total growth rate. The figures were 1.37 percent and 28.03 percent for the service sector.

The low growth rate of the agricultural production, forestry and seafood sectors was attributed to drought and saline intrusion, Covid-19, and African swine fever (ASF).

The number of newly set up and restored businesses in the first nine months of 2020 reached 133,600, an increase of 2.9 percent over the same period last year.

A survey on the business trends of manufacturing and processing enterprises found that enterprises were optimistic about production and business in Q4, with 81 percent of enterprises believing that the situation will be better.

Around 99,000 businesses were registered in the first nine months of the year, while 38,600 suspended operations, an increase of 81.8 percent over the same period last year.

Around 27,600 businesses stopped operation, following procedures for dissolution, a decrease of 2.4 percent. Nearly 12,100 businesses completed procedures for dissolution, up by 0.1 percent. Meanwhile, 36,500 businesses were not found operating at their given addresses, up by 39.6 percent.

This survey also found that 32.2 percent of enterprises thought the situation in Q3 would be better than in Q2, while 31.9 percent said they would still face difficulties and 35.9 percent said that business would be stable.

More than 45 percent of businesses think the situation in Q4 will be better than Q3, 19 percent predict bigger difficulties, and 35.4 percent think the situation will be stable.

Despite challenges, many Vietnam enterprises are still ‘swimming against the current’, and continuing to implement their investment projects.

Hoa Phat Group is speeding up its project on a huge steel complex in Quang Ngai. Thanh Cong Group at the same time started construction of an automobile assembling factory No 2 in Ninh Binh and an automobile supporting industry complex in Quang Ninh.

Tam An