Tourism, transportation, retail… are forecasted to be heavily impacted by the 4th wave of COVID-19 in Vietnam.
1. Continuing the recovery momentum
In the macroeconomic update report in April, the World Bank (World Bank) said that the index of industrial production of Vietnam increased by 1.1% (from the previous month) and 24.1% (from the previous month). in the same period last year).
According to the World Bank, Vietnam’s industrial production continues to grow, reflecting the recovery of domestic consumption in addition to high demand for high-tech industrial products from the external economic sector.
“The most dynamic sub-sectors include beverages, clothing and home appliances, base metals, electronics, computers and optical products, and machinery and equipment. The PMI rose from 53, 6 in March to 54.7 in April, marking the growth in manufacturing and processing industry production for six consecutive months,” the World Bank stated in the report.
Additionally, April retail sales rose 2.3% month-on-month, indicating that consumer demand has recovered somewhat from the third COVID-19 outbreak in late January 2021.
However, merchandise exports decreased slightly by 3.4% (month-on-month), while imports continued to increase by 2.6% in April.
The fastest growing export turnover is machinery, followed by computers and electronics, and phones. Footwear and textiles also recovered strongly (up 19% and 10% respectively over the same period last year).
The high import turnover was mainly due to the boom in imports from China, Korea and ASEAN.
“This reflects the high reliance on foreign materials and intermediate goods in Vietnam’s exports”, he said.
In addition, in April, Vietnam attracted $2.2 billion in FDI, 53% lower than the previous month and 42% lower than the same period last year. But in the first 4 months of the year, the amount of foreign direct investment (FDI) is almost equivalent to the same period in 2020.
Notably, the consumer price index (CPI) increased by 0.5% (month-on-month), mainly due to the high prices of consumer goods, including food, beverages and tobacco, clothing, and household appliances and home appliances.
2. Consider a large-scale support package
According to the World Bank, the fourth outbreak of COVID-19 has resulted in a sharp increase in community infections, forcing the Government to close schools in many provinces and re-impose health and restrictive measures travel restriction.
Domestic economic activities will be affected, especially in areas such as tourism, transport and retail, depending on the severity of this outbreak and how quickly the Government responds.
“If this outbreak has a strong impact, the Government may need to consider boosting domestic demand by adopting a more accommodative fiscal policy, including measures to increase support for businesses and people affected”, the World Bank recommended.