Production of export wooden products at a company located in Binh Duong Province. In late July, the World Bank forecast the country's GDP growth could reach 2.8 per cent in 2020. (Photo: VNA) Hanoi (VNS/VNA) - Economists have predicted the resurgence of theCOVID-19 pandemic could leave Vietnam facing its lowest level of economicgrowth in 35 years.
After 99 days without any new cases of community transmission, a localinfection was confirmed in Da Nang onJuly 25 and the virus hassince spread around the country and caused 15 fatalities, greatly impactingeconomic activities.
According to many experts, the return of the virus will immediately eclipse theglimmer of hope for an early recovery for the tourism industry.
Dinh Trong Thinh, a lecturer of the Academy of Finance, said: “If the pandemicis not well controlled this time, the economic impact will be very large due tothe bigger scale.”
Thinh added the local economy was under great pressure from weak demand forgoods, products and services and it was facing the risk of interruptedproduction and service supply capacity.
“The cost of fighting against the new wave of the pandemic and overcoming itsinfluence will be much more expensive than the previous one. The most negativeimpacts will be seen on employment, production and business growth," hetold local media.
Nguyen Dinh Cung, former director of Central Institute for Economic Management(CIEM) said the economy was now defined by being unstable, uncertain andinsecure, with many forecasting a deteriorating direction.
“All forecasts could be changed constantly in this situation so we must preparefor all scenarios. Local economic growth will definitely be low. It could bethe lowest of 35 years," he said.
Cung said in the short term, people will limit travel and spending, causing adecrease in demand.
“At the same time, a lot of public investment is still stagnant because theimplementers are afraid of risks and don’t decide to act or to strengthen themquickly as they should," he added.
To solve public investment issues, the CIEM’s former director said: “Thecapital allocation should be assigned more to the Government than the NationalAssembly. More decision-making power in public investment decisions should begiven to leaders of provinces, cities and ministers.”
Stefanie Stallmeister, acting director of the World Bank (WB) in Vietnam, alsosaid the country was facing the biggest economic shock in the past 35 years.
She told local media though the country stood stable in the first half of theyear, the economy only grew 1.8 percent, equivalent to a decrease ofapproximately five percentage points compared to the previous growthtrajectory of the country.
“Vietnam must be active in a world full of uncertainty both domestically andinternationally. Therefore, we believe that policymakers will have to findalternative directions for the country's traditional growth drivers, includingoverseas demand and weakening domestic consumption," she said.
Stallmeister suggested three measures for Việt Nam. They were consideringcarefully removing international travel restrictions gradually, speedingup the implementation of public investment projects to increase domesticdemand and supporting the private sector, especially in the most severelyaffected industries such as tourism, processing and manufacturing for export,with financial support and smart incentive policies.
With the pandemic's impacts growing, many businesses have said they have notreceived help from Government support packages.
The local business community has also been calling on banks to relax loanpolicies to give firms more time to adjust and seek new markets, said NguyenQuang Vinh, CEO of a construction material company.
"We are doing our best to find new businesses and to make sure we don'thave to lay off our workers," Vinh said.
Director of tour firm New World Travel Dang Thanh Trung said: "It will bevery difficult for domestic travel to gain momentum, especially now everyone isanxiously watching how the second wave unfolds."
Most experts urged the Government to make it easier for businesses to accessthe support packages.
Cung said though the current support policies were basically sufficient, somepolicies such as policies to suspend, postpone, exempt taxes, should beextended to serve increasing difficulties from the new wave of the virus.
In late July, the World Bank forecast the country's GDP growth could reach 2.8percent in 2020 and will recover to 6.7 percent in the next year. In the latestreport, the bank forecast Vietnam to rank fifth in the global growth this year./.
After 99 days without any new cases of community transmission, a localinfection was confirmed in Da Nang onJuly 25 and the virus hassince spread around the country and caused 15 fatalities, greatly impactingeconomic activities.
According to many experts, the return of the virus will immediately eclipse theglimmer of hope for an early recovery for the tourism industry.
Dinh Trong Thinh, a lecturer of the Academy of Finance, said: “If the pandemicis not well controlled this time, the economic impact will be very large due tothe bigger scale.”
Thinh added the local economy was under great pressure from weak demand forgoods, products and services and it was facing the risk of interruptedproduction and service supply capacity.
“The cost of fighting against the new wave of the pandemic and overcoming itsinfluence will be much more expensive than the previous one. The most negativeimpacts will be seen on employment, production and business growth," hetold local media.
Nguyen Dinh Cung, former director of Central Institute for Economic Management(CIEM) said the economy was now defined by being unstable, uncertain andinsecure, with many forecasting a deteriorating direction.
“All forecasts could be changed constantly in this situation so we must preparefor all scenarios. Local economic growth will definitely be low. It could bethe lowest of 35 years," he said.
Cung said in the short term, people will limit travel and spending, causing adecrease in demand.
“At the same time, a lot of public investment is still stagnant because theimplementers are afraid of risks and don’t decide to act or to strengthen themquickly as they should," he added.
To solve public investment issues, the CIEM’s former director said: “Thecapital allocation should be assigned more to the Government than the NationalAssembly. More decision-making power in public investment decisions should begiven to leaders of provinces, cities and ministers.”
Stefanie Stallmeister, acting director of the World Bank (WB) in Vietnam, alsosaid the country was facing the biggest economic shock in the past 35 years.
She told local media though the country stood stable in the first half of theyear, the economy only grew 1.8 percent, equivalent to a decrease ofapproximately five percentage points compared to the previous growthtrajectory of the country.
“Vietnam must be active in a world full of uncertainty both domestically andinternationally. Therefore, we believe that policymakers will have to findalternative directions for the country's traditional growth drivers, includingoverseas demand and weakening domestic consumption," she said.
Stallmeister suggested three measures for Việt Nam. They were consideringcarefully removing international travel restrictions gradually, speedingup the implementation of public investment projects to increase domesticdemand and supporting the private sector, especially in the most severelyaffected industries such as tourism, processing and manufacturing for export,with financial support and smart incentive policies.
With the pandemic's impacts growing, many businesses have said they have notreceived help from Government support packages.
The local business community has also been calling on banks to relax loanpolicies to give firms more time to adjust and seek new markets, said NguyenQuang Vinh, CEO of a construction material company.
"We are doing our best to find new businesses and to make sure we don'thave to lay off our workers," Vinh said.
Director of tour firm New World Travel Dang Thanh Trung said: "It will bevery difficult for domestic travel to gain momentum, especially now everyone isanxiously watching how the second wave unfolds."
Most experts urged the Government to make it easier for businesses to accessthe support packages.
Cung said though the current support policies were basically sufficient, somepolicies such as policies to suspend, postpone, exempt taxes, should beextended to serve increasing difficulties from the new wave of the virus.
In late July, the World Bank forecast the country's GDP growth could reach 2.8percent in 2020 and will recover to 6.7 percent in the next year. In the latestreport, the bank forecast Vietnam to rank fifth in the global growth this year./.
VNA
