Unprecedented: Vietnam’s GDP in Q3/2021 drops 6.17%
Data released by the General Statistics Office of Vietnam on September 29 showed that the gross domestic product (GDP) in the third quarter of 2021 decreased by 6.17% year on year, the biggest drop since Vietnam began publishing its quarterly GDP.
Many businesses have had to suspend operation because of the Covid-19 pandemic.
Specifically, the agriculture, forestry and fishery sectors increased by 1.04%; the industry and construction sector decreased by 5.02%; and the service sector decreased by 9.28%.
GDP in the January-September period of 2021 increased by only 1.42% over the same period of last year due to the serious impacts of the Covid-19 epidemic, which forced many provinces and cities to impose prolonged lockdown.
The Covid-19 epidemic also seriously affected commercial and service activities. Negative growth in the past nine months of 2021 of some service industries caused the reduction of overall growth of the service sector and the entire economy.
About the use of GDP in the third quarter, consumption was down 2.83 percent year-on-year, asset accumulation up 1.61 percent, exports of goods and services up 2.51 percent, and imports of goods and services moved up 10.75 percent.
The nine-month GDP growth was thanks to the agro-forestry-fishery sector with an expansion rate of 2.74 percent, contributing 23.52 percent to the overall growth; industry and construction with a growth rate of 3.57 percent, contributing 98.53 percent.
Meanwhile, services were down 0.69 percent, pulling national growth down by 22.05 percent.
Agro-forestry-fisheries continued to play its role as a mainstay of the economy amid the pandemic. Specifically, agriculture grew by 3.32 percent, contributing 0.31 percentage point to the added value of the economy. Forestry and fisheries each added 0.02 percentage point thanks to their respective expansion rates of 3.3 percent and 0.66 percent.
Meanwhile, industry and construction, manufacturing and processing are growth driving forces of the economy with an expansion of 6.05 percent, contributing 1.53 percentage points to the added value of the entire economy.
The prolonged pandemic badly affected trade and service activities. The wholesale and retail sector fell by 3.1 percent, the transportation and warehousing industry decreased by 7.79 percent and the accommodation and food service industry dropped by 23.18 percent.
The health sector, in contrast, achieved the highest growth rate with a sharp increase of 21.15 percent, followed by the financial, banking and insurance industry with an increase of 8.37 percent and information and communication, up by 5.24 percent.
According to the World Bank’s "Digital Vietnam: The Road to the Future", Vietnam has been severely affected by the COVID-19 pandemic and it forecasts that Vietnam’s growth rate in 2021 will decrease to 4.8%.
In the US, policymakers are in a dilemma when they want to tighten money pumping into the economy to prevent the risk of high inflation, but they are afraid of losing the recovery momentum.