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From the outbreak of Covid-19:

It is necessary to build an economy capable to adapt for changes!

(VLR) According to reports evaluating impacts from the COVID-19 outbreak to socioeconomic developments of Vietnam by the Ministry of Planning and Investments at a Government’s regular meeting on February 12th, 2020, Vietnam’s GDP is likely to reduce to under 6% due to impacts from COVID-19 outbreak. Therefore, it is necessary to build an independent economy which is capable to resist changes from outside.

Import-export turnover predicted to go down

On February 12th, there was a Government’s regular meeting hosted by the PM Nguyen Xuan Phuc to evaluate impacts from COVID-19 to Vietnam’s economic-socio developments, to update and give out prediction of growth to 2020, and to give out guidance to achieve economic-socio targets of 2020. Many said the world’s economy in 2020 would go down.

Impacts from COVID-19 will make the world’s economic downturn faster and more obvious. Especially, in case the epidemic lasts long, the result will be more severe. The outbreak of COVID-19 has been caused comprehensive impacts to all Vietnam’s economic-socio fields and had psychological effects on people, caused temporary labor shortage, interrupted supply chains and trade flows and production stagnations…

It is necessary to encourage Vietnam’s enterprises to develop, to encourage goods made by Vietnamese and in Vietnam. It is necessary to build an independent economy which enables to resist and adapt changes.

Nguyen Chi Dung, the Minister of the Ministry of Planning and Investments

On the online discussion “How does Corona Virus have impacts on Vietnam’s economy?” on February 6th, PhD Nguyen Duc Thanh- Head of Vietnam Institute for Economic and Policy Research (VERP) said the tourism sector has had serious impacts from the outbreak. According to Thanh, the number of annual tourists from China accounts for 1/3 of the total number of tourists to Vietnam. The drop of the number of tourists from China is likely to make the target of attracting international tourists impossible to complete, have serious impacts to the tourism sector’s income and its contribution to the national GDP.

According to economy experts, measurements of border controls to prevent the spread of the epidemic will be implemented, which will make export activities between Vietnam and China difficult in a particular time, especially those as agricultural products, aqua products and foods… At the same time, some production sectors in Hubei (China) are under stagnation, resulting in interruption of supply, which causes bad impacts on our sectors of textile and garment, electronics, consuming goods and flat bar steel…

The Ministry of Planning and Investment said Vietnam having a wide openness of economy and long border with China would suffer from no small impacts. Import-export turnover of the second quarter- in case the epidemic lasts till the end of the second quarter of 2020- will reach around USD 58.5bn in export, a decrease of 8.1% and will reach around USD 61bn in import-a decrease of 3.1% year-over-year in 2019.

“An opportunity” for vietnam to have a look at itself

According to economic experts, besides negative impacts from the outbreak of COVID-19, some sectors can have short-time benefits thanks to interruption of cargo supply from China to Vietnam. Those are sector in downstream segmentation suffering from competitions against China’s products as textile and garment, steel, and tires.

Nguyen Thanh Tuan, Head of Equity Analysis Dept., VNDIRECT Securities J.S (VNDS) said in sectors where Vietnam and China are competitors in the field of export will record a short-term increase of orders thanks to temporary shift from China to Vietnam as sectors of textile and shoe leather. And sectors of pharmaceuticals, medical materials and medical retail will have benefits, including enterprises having license to import specific medicine, distribution companies, and medical material production companies
as well.

SSI experts said e-commerce will be a better choice compared to traditional retail, when people do not go out for shopping. In the first quarter of 2020, gas power plants will benefits from reduced price of crude oil
and gas.

In the difficult situation from the outbreak of COVID-19, the Minister of the Ministry of Planning and Investments Nguyen Chi Dung affirmed it would be an opportunities for Vietnam to have a look back at itself, to see its weakness in the economy; it is an opportunity to arrange, to restructure its economy- a time to have a look at the economy structure and then to speed up restructuring each sector and each field. “It is necessary to encourage Vietnam’s enterprises to develop, to encourage goods made by Vietnamese and in Vietnam. It is necessary to build an independent economy which enables to resist and adapt changes,” said Dung.

Severe acute respiratory syndrome by the new Corona virus (COVID-19) started at the end of 2019 in Wuhan (China). In fear of a global epidemic, WHO declared the outbreak as a global emergency in January 30th, 2020. In February 1st, the PM Nguyen Xuan Phuc declared the outbreak of COVID-19 in Vietnam. At the time of declaration, there were 6 cases recorded positive to Corona virus in four provinces and cities: HCMC, Thanh Hoa, Vinh Phuc and Nha Trang. Previously, the Ministry of Health declared the outbreak of COVID-19 in Khanh Hoa after a case of being positive recorded.

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