Noi Bai International Airport is not as crowded as usual due to the outbreak (Photo: VNA) HCM City (VNS/VNA) - Though Vietnam’s economy will suffer in the short termfrom the novel coronavirus epidemic, the country’s drive to integrateinto the global economy will continue to create plenty of new opportunities fortrade and investment in the long run, experts have said.
The recent Annual Vietnam Business Community Sentiment Index showed a huge dropin overall business confidence in Vietnam for 2020 compared to last year due tothe epidemic originating in China.
Ralf Matthaes, managing director of Infocus Mekong Research, said: “I havebeen living in Vietnam for over 26 years and have never seen such a hugeplummet in overall confidence, not even during the 2010-2011 real estate bubbleburst.”
Frederick Burke, managing partner of Baker Mckenzie law firm and aveteran of WTO Accession and Bilateral Trade in Vietnam, said howeverthat the country’s integration into the global economy through free tradeagreements would continue to create new opportunities for trade and investmentover the years.
This year, there would be challenges for many businesses that might not bestrong enough to withstand the shocks to the supply chain and creditavailability, he warned.
“The tourism industry was the first to feel it, but even manufacturing forexport is starting to feel the pain as imported components from China aregetting held up in China’s shutdown.”
“Resiliency in supply chains has already become a theme and now it’s front andcentre.”
Matthaes said: “This year will certainly dampen short-term gains forVietnam, especially in the consumer-based sectors, as consumers proceed withcaution.
“However, as one of the most optimistic, resourceful and resilient peoples inAsia, this should only be a blip on Vietnam’s overall economic trajectory.
“Coronavirus will not derail Vietnam’s amazing rise to the top of theAsian economic food chain.”
Last year was a positive one in Vietnam for business with 6.5 percent GDPgrowth, record growth in exports and foreign direct investment and inflationbeing controlled at 3.5 percent, he said.
Chris Hunt, manager director of HCM City SecuritiesCorporation (HSC), said: “It is still early days living with the newstrain of COVID-19 virus.
“As this is a new virus, timings are hard to forecast, but based on SARS andavailable information on both new cases and actual severity, we would behopeful that much economic activity will be returning to normal by the end of2020.”
It’s important to note not every sector will be impacted equally, some more sothan others.
Stephen Wyatt, country head of property consultancy JLL Vietnam, said: “Earlyindications suggest the hotel and hospitality, retail and F&B sectors areamong the hardest hit.
“It remains to be seen how severe and how long the virus situation will last,and this means that some real estate developers may need to find additionalfunding or consider joint-venture partners.
“History suggests that after similar events business confidence reboundsquickly, so we believe this will result in a positive impact on the market inthe longer term.”
Businesses with heavy reliance on China will obviously feel the impact, manyseverely.
The daily virus warnings from the Ministry of Health have made Vietnameseconsumers apprehensive, deadening demand.
The bigwinners in 2020 will be online shopping, delivery services, the automotiveindustry, packaged foods and, possibly, homecare products, as consumers spendmore time at home and less time in public places.
Though online shopping was only worth around 5 percent of retail sales lastyear, 76 percent of all consumers have bought online in the last three monthsand it is growing at above 20 percent annually.
With the epidemic impacting shopping behaviour -- for instance, consumers wantto avoid crowds -- online services are expected to continue growing and drawnew customers.
In terms of investor sentiment and the stock market, the epidemic actuallyprovides ample opportunity.
Andy Ho, managing director and chief investment officer of VinaCapital, said:“Investors are looking for a reason to be ‘risk-on’. Though there is a sense ofover caution, the Vietnam stock markets have not had to endure a significantdecline.
As soon as the epidemic is under control, “we expect capital markets around theworld including Vietnam to recover and possibly surpass levels seen at year-end2019”.
Bao Nguyen, president of the Canadian Chamber of Commerce in Vietnam, saidthe country remains a fantastic business destination that deserves all thegrowing attention it is getting around the globe.
The report, which surveyed 242 CEOs, managing directors and business owners,among others, was compiled by Infocus Mekong Research, a marketresearch service provider based in Vietnam./.
The recent Annual Vietnam Business Community Sentiment Index showed a huge dropin overall business confidence in Vietnam for 2020 compared to last year due tothe epidemic originating in China.
Ralf Matthaes, managing director of Infocus Mekong Research, said: “I havebeen living in Vietnam for over 26 years and have never seen such a hugeplummet in overall confidence, not even during the 2010-2011 real estate bubbleburst.”
Frederick Burke, managing partner of Baker Mckenzie law firm and aveteran of WTO Accession and Bilateral Trade in Vietnam, said howeverthat the country’s integration into the global economy through free tradeagreements would continue to create new opportunities for trade and investmentover the years.
This year, there would be challenges for many businesses that might not bestrong enough to withstand the shocks to the supply chain and creditavailability, he warned.
“The tourism industry was the first to feel it, but even manufacturing forexport is starting to feel the pain as imported components from China aregetting held up in China’s shutdown.”
“Resiliency in supply chains has already become a theme and now it’s front andcentre.”
Matthaes said: “This year will certainly dampen short-term gains forVietnam, especially in the consumer-based sectors, as consumers proceed withcaution.
“However, as one of the most optimistic, resourceful and resilient peoples inAsia, this should only be a blip on Vietnam’s overall economic trajectory.
“Coronavirus will not derail Vietnam’s amazing rise to the top of theAsian economic food chain.”
Last year was a positive one in Vietnam for business with 6.5 percent GDPgrowth, record growth in exports and foreign direct investment and inflationbeing controlled at 3.5 percent, he said.
Chris Hunt, manager director of HCM City SecuritiesCorporation (HSC), said: “It is still early days living with the newstrain of COVID-19 virus.
“As this is a new virus, timings are hard to forecast, but based on SARS andavailable information on both new cases and actual severity, we would behopeful that much economic activity will be returning to normal by the end of2020.”
It’s important to note not every sector will be impacted equally, some more sothan others.
Stephen Wyatt, country head of property consultancy JLL Vietnam, said: “Earlyindications suggest the hotel and hospitality, retail and F&B sectors areamong the hardest hit.
“It remains to be seen how severe and how long the virus situation will last,and this means that some real estate developers may need to find additionalfunding or consider joint-venture partners.
“History suggests that after similar events business confidence reboundsquickly, so we believe this will result in a positive impact on the market inthe longer term.”
Businesses with heavy reliance on China will obviously feel the impact, manyseverely.
The daily virus warnings from the Ministry of Health have made Vietnameseconsumers apprehensive, deadening demand.
The bigwinners in 2020 will be online shopping, delivery services, the automotiveindustry, packaged foods and, possibly, homecare products, as consumers spendmore time at home and less time in public places.
Though online shopping was only worth around 5 percent of retail sales lastyear, 76 percent of all consumers have bought online in the last three monthsand it is growing at above 20 percent annually.
With the epidemic impacting shopping behaviour -- for instance, consumers wantto avoid crowds -- online services are expected to continue growing and drawnew customers.
In terms of investor sentiment and the stock market, the epidemic actuallyprovides ample opportunity.
Andy Ho, managing director and chief investment officer of VinaCapital, said:“Investors are looking for a reason to be ‘risk-on’. Though there is a sense ofover caution, the Vietnam stock markets have not had to endure a significantdecline.
As soon as the epidemic is under control, “we expect capital markets around theworld including Vietnam to recover and possibly surpass levels seen at year-end2019”.
Bao Nguyen, president of the Canadian Chamber of Commerce in Vietnam, saidthe country remains a fantastic business destination that deserves all thegrowing attention it is getting around the globe.
The report, which surveyed 242 CEOs, managing directors and business owners,among others, was compiled by Infocus Mekong Research, a marketresearch service provider based in Vietnam./.
VNA
