Hanoi’s economy is expected to recover in a V-shaped pattern, meaning that after a sharp decline the economy would quickly and strongly rebound, according to Vuong Dinh Hue, secretary of the Hanoi Party Committee.

Overview of the dialogue.

The city must prevent any U or L-shaped pattern of the economy as a L-shaped outcome would mean no recovery in the aftermath of the pandemic, Hue said at a dialogue on April 16 between Hanoi’s leadership and the business community on how to overcome Covid-19 impacts.

Secretary of Hanoi Party Committee Vuong Dinh Hue.

Hanoi is trying to minimize the negative impacts of the Covid-19 pandemic on the economy while nurturing recoverability in the post-pandemic period, Hue said.

The city's Party chief said the city set growth target for the agricultural sector at 4.04%, with a focus on the repopulation of the pig herd from the devastating damage caused by the African swine fever.

Meanwhile, the city would do its utmost to disburse VND40 trillion (US$1.7 billion) of public investment funds, a move to encourage private investment.

“This is the period when the city would solve all issues related to public and private investments with a clear deadline, ranging from site clearance, planning adjustment and simplification of administrative procedures,” Hue said. 

According to Hue, Hanoi would implement the government’s support packages as quick as possible to timely support enterprises and people.

Three economic growth scenarios

Director of the municipal Department of Planning and Investment Nguyen Manh Quyen said although the city recorded economic growth of 3.72% year-on-year in the first quarter, the majority of business and production activities were heavily affected by the pandemic.

Director of the municipal Department of Planning and Investment Nguyen Manh Quyen.

To date, Hanoi has a total of 285,360 operational enterprises, of which small- and medium-sized ones account for 97%. In the January-March period, the number of enterprises suspending operations surged 36% year-on-year to 4,240 while over 13,215 people claimed unemployed benefits, up 22.2% year-on-year.

Quyen added that his department has set up three scenarios for economic growth amid the pandemic.

In the most optimistic one, the city would still reach the target growth of 7.5% in case the pandemic is contained within the second quarter and strong growth follows in subsequent quarters.

In the second scenario, if the pandemic is controlled in the third quarter but its impacts still linger in the next quarters, the growth rate is predicted at 6.42%.

In the third scenario where the pandemic continues into the year-end, the city's economy is set to expand 5.34%, higher than the country’s estimated growth of 5%.

Strong measures in place

Quyen said Hanoi has allocated VND1.02 trillion (US$43.4 million) in trust fund via the Vietnam Bank of Social Policies  so that the bank could provide preferential loans to the poor and social beneficiaries.

In parallel with the government’s support packages, the city plans to reduce business registration fees and provides financial support for non-business public units affected by the pandemic, Quyen said.

More importantly, Hanoi would continue to accelerate administrative reforms and wider application of pubic online services at advanced stages for greater convenience of enterprises and citizens, Quyen stressed.

In the immediate future, Hanoi iwill speed up development of sectors with high development potential in the current crisis such as agriculture and production of medical equipment, e-commerce, e-payment, and online study, among others.

“Hanoi remains firm on providing strong support for the business community to boost socio-economic development and in the fight against the pandemic,” Quyen said.