return icon

Vietnam economy accelerates to get back to normal state

With the resumption of key economic sectors' activities, such as manufacturing, services and retail, Vietnam’s economy is accelerating to get back to its normal state.

As the Covid-19 impacts start fading away, Vietnam is targeting domestic tourism as one of the key measures to boost economic recovery.

 Illustrative photo. 

Recently, airlines, including national flag carrier Vietnam Airlines, along with low-cost carriers Jetstar Pacific and Vietnam Aviation Service Company (VASCO), have announced their decisions to resume domestic flights and gradually return to full capacity from June.

In the manufacturing sector, companies are devising business strategies to cope with the new situation amid plunge in demands from major export markets. Firms in the garment and textile industry, including Garment 10, Chien Thang Garment, Thai Nguyen Garment, among others, have shifted from apparels to producing face masks and protective gear, aiming to meet growing demands from the domestic and foreign markets.

Automobile manufacturers and assemblers in Vietnam, such as Honda, TC Motor, Vinh Phat Motor have all resumed operations. Similarly, those in the services sector have reopened as people return to their normal lives.

Leverage for growth

The Asian region, despite being the first to be hit by the pandemic globally, has effectively contained it and maintained positive economic growth compared to other parts of the world.

For Vietnam, while the International Monetary Fund (IMF) predicted the country to grow at 2.7% this year, the highest growth rate in Southeast Asia. Prime Minister Nguyen Xuan Phuc in a government meeting on May 5 said the country is determined to achieve a 5%-plus growth rate.

To support economic growth, since early March, the government has rolled out a number of support programs, including a credit aid package worth VND300 trillion (US$12.87 billion), a VND180-trillion (US$7.63 billion) fiscal stimulus package in forms of delay of payment of value-added tax, corporate tax and income tax, and a financial support package for vulnerable people worth VND62 trillion (US$2.7 billion).

There is expectation that more support would come. Recently, the State Bank of Vietnam (SBV), the country’s central bank, has further cut policy rates to buttress economic recovery. It is estimated that for Vietnam’s GDP growth to reach 5%, credit growth should be at least 10%.

Moreover, the government has stepped in to reduce prices of goods under its control, including electricity, water, or rice, aiming to boost production and put inflation under control.

The Ministry of Planning and Investment (MPI) previously said all the government support programs worth a combined of VND636 trillion (US$27.26 billion), or 10% of the GDP, would not negatively affect the consumer price index, a main gauge of inflation.

In its latest World Economic Outlook report, the IMF said Vietnam’s economy could be the best performer in the Southeast Asian region.

The Economist suggested Vietnam is the 12th strongest financially out of 66 emerging economies, thanks to stable economic indicators such as public debt, foreign debt, cost of borrowing, and reserve cover.

Among measures to boost economic recovery, the government has turned to public investment as top priority.

Data from the General Statistics Office revealed an increase of one percentage point in the amount of public investment disbursement would contribute an addition of 0.06 percentage points to overall growth.

More importantly, strong public disbursement would kickstart capital inflows into other sectors.

The Covid-19 pandemic, despite its severe consequences to the economic performance, has not stopped the expansion of Vietnam’s middle class, one of the key driving forces, and the private sector.

“In case the Covid-19 pandemic is contained within the April-June quarter, there is possibility that Vietnam’s economy could grow more than 5%,” said Vo Tri Thanh, director of the Institute for Brand and Competitiveness Strategy. Hanoitimes

Nguyen Tung-Thao Nguyen



Central localities likely to be hit by typhoon Noru

AI integration the inevitable path ahead

Big Data and AI will be the optimal tools to run factories in the future and digital transition will help firms optimise costs and cut emissions.

Ministry to scrutinise VietGap certifications after fake labels found on vegetables

The Ministry of Agriculture and Rural Development is investigating reports of vegetables sold in supermarkets being marked with fake Vietnamese Good Agricultural Practices (VietGap) labels.

E-commerce sector in dire need of qualified candidates

The tight supply of qualified candidates in the labour market is a glaring issue facing e-commerce firms, according to insiders.

Unique green moss-covered homes of the Tay Con Linh mountain range

It is an ideal environment for plants to flourish and thrive, including thick green moss, which ethnic people use to cover the palm-leaf roofs of their homes.

Farmers save wild birds and the environment

Farmers in different provinces throughout Việt Nam have for years spent time and effort to save wild birds, giving them a home to nest and lay eggs.

Deputy PM highlights significance of int'l solidarity, cooperation at UN session

The strengthening of international solidarity and cooperation is key to addressing interlocking global challenges, affirmed Permanent Deputy PM Pham Binh Minh while addressing the general debate of the 77th Session of the UN General Assembly.

Huge potential for luxury real estate in Vietnam

The branded residence market is gaining a stronger foothold in the Vietnamese market with potential to further develop, shaping the lifestyle of the country’s elite, according to experts.


Action plan to promote green growth in agriculture

Vietnam’s economic growth counts on high-tech FDI

Vietnam’s economic growth has been accelerating in 2022, with experts considering high-tech foreign investments as a driver.

The “seven-star” islands in Quang Ninh

Along with crystal blue sea and beaches, the 7 Sao (seven star) islands also have caves and primeval forests.

Customs you only see in Vietnam

The travel site Culture Trip has listed a number of Vietnamese customs that often surprise foreign tourists:

Investors and buyers play waiting game in credit switch

The State Bank of Vietnam finally created extra credit room for some banks on September 7. However, the extension is deemed low and may not help real estate businesses and homebuyers access feasible capital sources for their projects.

Woodwork exports to EU, US drop as consumers cut spending

Many woodwork manufacturers complain that exports have been sliding as people in target markets have been tightening their purse strings.

Vietnam: new destination for multinationals to set up R&D centers

Vietnam wants to upgrade foreign direct investment (FDI) quality by manufacturing products with higher hi-tech and added value, and multinationals are also striving to do this after many years in Vietnam.