Fighting economic recession is like fighting enemy: Minister

Businesses step up production after the COVID-19 pandemic is put under control (Photo: VietnamPlus)

Hanoi (VNA) – Minister of Planning and Investment Nguyen Chi Dung forecast the country’s economic situation will face big challenges in the second half of the year with huge pressure on inflation control and markets for domestic products.

Administrations at all levels and sectors need to acknowledge the seriousness and urgency of the current socio-economic situation and not lack vigilance, he said, adding that economic recovery and development must be defined as one of the biggest tasks with the spirit of “fighting economic recession is like fighting the enemy.”

Dung delivered the message at an online conference between the government and localities on July 2.

There remain various challenges

As Vietnam is integrating deeply into the global economy, its economy has been also directly affected by the COVID-19 pandemic.

The Ministry of Planning and Investment’s report showed that Vietnam’s gross domestic product (GDP) expanded just 0.36 percent in the second quarter and 1.81 percent in the first half of 2020 – the lowest growth over the past decade.

The service sector also posted the lowest growth in the same periods during 2011-2020. Total goods retail sales and service revenue in the second quarter dropped by 5.8 percent from the previous quarter and the figure in the first six months fell by 0.8 percent from the same period last year.

Dung said COVID-19 has been under control in Vietnam but if the pandemic reoccurs the consequences will be very heavy and many businesses will have to suspend operations, be dissolved or go bankrupt.

In particular, international organisations such as the International Monetary Fund (IFM) and the World Bank (WB) have already revised down the world’s economic growth forecast, putting great pressure on economic and trade ties between Vietnam and its partners.

Minister of Planning and Investment Nguyen Chi Dung forecast the country’s economic situation will face big challenges in the second half of the year with huge pressure on inflation control and markets for production.

To stimulate economic growth, fast recovery and development, the minister suggested ministries, and central and local agencies promptly promote the implementation of solutions set in resolutions of the Party, National Assembly, Government and directions of the Prime Minister.

Dung also asked localities to bring their advantages into full play to welcome a wave of shifting FDI over the next six months.

The minister briefed attendees on the economic situation in the first half of this year, saying that total social investment reached 850 trillion VND (36.92 billion USD), up 3.4 percent against the same period last year and equal to 33 percent of the country’s GDP.

As of June 20, Vietnam had raked in 15.67 billion USD in foreign investment, down 15.1 percent year-on-year, while industrial production expanded 2.71 percent.

The country posted growth of 1.81 percent in the first half, Dung continued, its lowest result in decades but a truly remarkable figure given the situation. Vietnam is one of only a few countries posting GDP growth.

Minister of Planning and Investment Nguyen Chi Dung speaks at the meeting (Photo: VNA)

The highest target is to stabilise macro-economy

As many short-term and long-term challenges remain, Dung urged ministries and localities to focus on economic recovery with the spirit of “fighting against economic recession is like fighting the enemy”, similar to the fighting COVID-19 motto initiated by Prime Minister Nguyen Xuan Phuc.

He also asked them to foster innovation, apply regional and global standards and rules in economic management, seek new growth engines, and accelerate economic restructuring and recovery towards the development of a more independent and sustainable economy.

The minister also urged the review of all conditions regarding land, infrastructure, and human resources, to prepare for the shift in FDI to the country. Greater attention should be paid to environmentally-friendly projects funded by high-tech and multinational conglomerates, he said.

According to the minister, the government and ministries have issued many policies to remove difficulties for enterprises, thus facilitating business and production activities./.