Eight business fields to suffer most from Covid-19
Three major scenarios for economic development in 2020 have been drawn up by Can Van Luc and researchers from BIDV.
The researchers believe that the impact of the COVID-19 epidemic on Vietnam’s economy will be significant because of the rapid spread of coronavirus, Vietnam’s geographical location, and China's position as Vietnam’s leading economic and trade partner.
The epidemic is believed to impact Vietnam’s 8 major business fields – medical service and human resources; tourism and hospitality; transport; retail; foreign trade; investment; production and supply chains; and finance and banking.
Three scenarios for economic development have been described by researchers.
1/ The basic scenario, which is most likely to happen. The number of reported coronavirus infected patients increases in epidemic-stricken areas, but the epidemic can be controlled and prevented from spreading to other areas. Trade, tourism and investment activities would begin recovering from the second half of Q2.
The number of foreign investors, mostly Chinese and Asian, is estimated to fall sharply by 90 percent in Q1 and 70 percent in Q2, but will recover gradually from Q3.
It is estimated that revenue from foreign travelers would decrease by 20-22 percent in the year 2020 compared with 2019. The decrease would decrease Vietnam’s GDP by 5.49 percentage points in Q1, 4.27 percentage points in Q2 and 1.22 percentage points in the whole year of 2020.
As for foreign trade, in Q1, the total import/export turnover may decrease by 19-25 percent compared with Q1 2019 (19-20 percent decrease for export, 25 percent for import).
The trade surplus would increase the GDP in Q1 by 4.48 percentage points compared with 2019.
In Q2, GDP would increase by 3.73 percentage points thanks to the continued trade surplus.
In the second half of the year, imports and exports would recover step by step.
In general, the export may decrease by 10 percent and import by 11 percent in the whol year 2020.
2/ In positive scenario, the epidemic would be controlled soon and it won’t spread wide. If so, the measures to prevent epidemic (border gate closure, tourism and trade restriction) will be removed and activities will be resumed from early Q2.
The number of foreign investors is predicted to decrease by 90 percent in Q1, 50 percent in Q2 and 15 percent in the whole year 2020. The decrease of 19-20 percent in export has been designed for Q1, 12-13 percent for Q2 and 7 percent for the whole year.
As such, the GDP may see a decrease of 1.22 percentage points in Q1, 0.39 in Q2 and 0.32 percentage point in the whole year.
3/ With the negative scenario, the GDP would decrease by 1.24 percentage points, 1.46 and 2.71 percentage points, respectively.
The Ministry of Planning and Investment (MPI) has predicted that the GDP would grow by 5.96 percent, a 7-year low.
Hanoi’s biggest market at Dong Xuan is deserted amid fears of coronavirus.