Covid-19 has seriously affected the global economy and Vietnam is among the few countries with positive growth.

GDP increased by 1,81% in the first 6 months of 2020, the number of newly established enterprises decreased by 7,3%; the total registered capital decreased by 19% over the same peroid of 2019.

CPI in June increased by 3,17%; so that, average inflation in 6 months is at 4,19% because of the increase of food prices. According to Vietnam Institute for economic and Policy Research (VEPR), Vietnam is also facing many risks and challenges in an unstable world economic enviroment and uncertain future.

The recurrence of Covid-19 in many countries with long lockdown measures break the supply chains. VEPR forevasts a positive scenario that GDP will increase 38% for the whole year. At a lower scenario, GDP will increase only 2,2% if we face disadvantages due to Covid-19 pandemic.

VEPR recommends that the fiscal space may still available, but it is necessary to consider the monetary policy carefully, as it is forced by inflation and exchange rate.

What is essential at this tiem is that inflation, interest rate and exchange rate need to be maintained stability in preparation for the post-pandemic recovery period.

Diversification of the export - import markets should be focused in order to avoid heavy dependence on a number of major economic partners.

The VEPR experts group urge that Vietnam should step by step build a fiscal buffer to prevent unexpected shocks as Covid-19 pandemic./.