Home / Economy / Trade - Service
Vietnam economic recovery firms up in September: WB
Hai Yen 16:18, 2020/10/17
Under growing uncertainties in both the domestic and international contexts, greater attention should be paid to mitigating risks facing public finance and the financial sector, stated the World Bank.

Vietnam’s economic recovery appears to be firming up and becoming more-broad based, suggesting that GDP growth rate could reach 2.5– 3.0% in 2020, according to the World Bank’s latest note.

After a record slowdown in the second quarter, when the economy only grew by 0.39%, growth rebounded to 2.62% year-on-year in the third quarter. Overall, the economy expanded by 2.1% over the first nine months of 2020.


That is significantly lower than the 7.0% growth rate in the same period in 2019, but still a remarkable performance in the global Covid-19 context, said the World Bank.

While manufacturing and retails sales continue to register lower rates of growth than during the pre Covid-19 period, both expanded faster in September than in August. The industrial production index grew 2.4% month-on-month and 4.8% year-on-year in September, up from 2.1% year-on-year recorded in August.


Growth of retail sales of goods and services rebounded to 2.2% month-on-month in September and grew 5.3% year-on-year, similar to July. Retails sales of goods has been the main driver of growth in this subsector. Travel and tourism are picking up again domestically.

Unemployment rose significantly—albeit from a low base—in response to the April lockdown. Urban workers were most affected as they were more exposed to mobility measures and restrictions. While conditions have gradually improved in recent months, the recovery of the labor market is still in progress.


Not only has the urban unemployment rate remained higher than before the Covid-19 crisis—a significant number of people have left the labor force. Labor force participation, which reaching 74% in the third quarter, remained 2.4 percentage points lower than the same period last year.

Vietnam’s merchandise trade surplus reached US$16.8 billion in the first nine months of the year, bolstered by US$2.8 billion surplus in September. The value of goods exports grew by 8% month-on-month, while good imports increased by 10.7%.

Notably, domestically owned exporters continued to exhibit strong resilience—up by 20.2% in the first nine months of the year compared the same period of 2019—while foreign-owned exporters posted a contraction of 2.9%.


Trade, by partner, varied significantly during the January - September of the year, as exports increased to the United States and China but fell slightly to the EU. Similarly, imports from China grew by 2.7%, while they decreased from all other main partners.

Foreign direct investment (FDI) recovered in September to about US$1.65 billion, compared to the August low of US$720 million. For the first nine months of 2020, total commitments were down by about 19% compared to the same period in 2019—strong performance in the global context where FDI flows are projected to decline by 30–40% according to UNCTAD’s latest projections.


Significant increase in capital spending

Since the beginning of the Covid-19 crisis, the government has shifted its fiscal policy from consolidation to counter-cyclical, with the objective to limit the short-term costs on the economy and stimulate recovery.

As a result, total revenue declined by 11.5% during the first nine months of 2020 compared to the same period in 2019. Concurrently, State investment expenditure increased by 40.1% in the January – September of 2020 compared to the same period last year. This is partly due to notable improvement in disbursement, accounting for 57.2% as of September 2020, higher than the corresponding figure for 2019 of 45.1%.

Under growing uncertainties in both the domestic and international contexts, greater attention should be paid to mitigating risks facing public finance and the financial sector, concluded the World Bank.

TAG: Vietnam World Bank exports trade economic recovery FDI uncertainties covid-19 coronavirus nCoV pandemic
Other news
13:49, 2021/49/27
Vietnam Gov’t to further promote public-private partnership in all fields: PM
The Government is working hard to ensure businesses and people benefit from every policy or decision, Prime Minister Pham Minh Chinh has said.
11:24, 2021/24/27
How will Vietnam apply domestic airfare floor price?
The imposition of the floor price is aimed at balancing the interests of local consumers, airlines, and the State.
16:37, 2021/37/24
Earning trust - key to enter UK market
Vietnam stands 22nd among major suppliers to the UK and no doubt the country can climb up the rank.
05:41, 2021/41/24
CPTPP helps local enterprises mitigate Covid-19 impacts
Local firms are taking advantage of opportunities from the deal at a time when trading activities are struggling with Covid-19 impacts.
12:58, 2021/58/22
Vietnam economy set to rebound in 2022 despite short-term setbacks: ADB
Growth could be aided by a revival of domestic demand, an acceleration in the disbursement of public investment funds, an expansion to new export markets, and the expected global economic recovery.
18:24, 2021/24/21
Vietnam’s wood industry strives to extend its reach globally
Online platforms will help Vietnamese businesses expand their foothold in the foreign market.