Citizens get vaccinated in a clinic in the southern province of Binh Phuoc. Economic growth after the COVID-19 pandemic will largely depend on the vaccine rollout. (Photo: VNA) They said thateconomic growth would also depend on the effectiveness and side effects ofdisease prevention measures and financial support packages. They said bad debtscontinued to be accumulated and could sharply increase to exceed the tolerancethreshold of businesses. This is a potential financial risk in thepost-pandemic economy.
Nguyen Duc Thanh,Director of the Vietnam Centre for Economic and Strategic Studies (VESS), saidbecause of the slow pace of vaccination, Vietnam missed the beat of the worldeconomy’s recovery in 2021. This might lead to the loss of relative advantage. Vietnam’svaccine rollout was relatively slow compared to other countries.
The pandemicoutbreaks in 2021 slowed the country’s economy growth and caused supply chaindisruptions and labour market disturbances. Domestic businesses had beenseverely hurt. In addition, geopolitical shifts and developments of the worldeconomy might increase risks for businesses in terms of the price of rawmaterial.
Thanh saideconomic growth in the first nine months this year did not really reflect allthe difficulties of the economy. The resistance of enterprises had declined,particularly businesses in the southern cities and provinces which weresuffering great losses due to the fourth wave of COVID-19.
Pham The Anh,Head of the Macroeconomics Department under the National Economics University,said the market demand had worsened due to the impact of the COVID-19 pandemicand goods circulation had also been severely affected.
Anh toldparticipants that sooner or later, production costs would be reflected in theoutput prices such as expenses on gasoline, logistics, and costs of diseaseprevention. When social activities return to normal, consumer demand increases,the above factors would affect prices and put pressure on inflation. Itwas forecast that by the end of this year, the price of foodstuffs might risedue to difficulties in supply.
Thànhforecast that the high growth scenario could be gained this year if allbusinesses reach adaption in terms of production and limit disruptions in goodssupply as of the fourth quarter of 2021. With such a prediction, the country’sgross domestic product (GDP) could reach less than two percent.
According tothe expert the low growth scenario is that cities and provinces have notconducted synchronised measures in the fight against the pandemic. This willcause difficulties in goods circulation. This may lead to the disruption ofcontracts and production plans and a labour shortage. As a result, thecountry’s GDP can fluctuate at 0.2 percent.
In order toensure the country’s economic growth in the high growth scenario, theGovernment should speed up vaccination campaigns in cities and provinces andensure smooth circulation of goods as well as work out fiscal packages forbusinesses and assist unemployed workers.
Provincialauthorities are also required to offer jobs for those who had fled Ho Chi MinhCity and nearby provinces of Binh Duong, Dong Nai and Binh Phuoc several monthsago due to the fourth COVID-19 wave that emerged in the country in late April./.
VNA
