Research Center

The economic impact of the pandemic becomes more visible in April. Amidst the health crisis, consumers are not willing to spend as much as before, while producers also are not ready to boost production. Thus, trade turned negative, CPI extended the downward momentum, and the industrial production hit an all-time low. Nevertheless, we expect that the economic setback will be less severe as the global wave of re-opening will gradually take place in May.

In 1Q20, our data shows prominent evidence that the COVID-19 has put the economy into the stagnation phase. The GDP growth was under the consensus expectation, while inflation and trade activities also lost their upward momentum. FDI reflected a pessimistic sentiment of global investors not only in Vietnam but also around the world. We estimate that economic activities will keep shrinking in this quarter until the pandemic is under control.

The latest GSO’s estimate shows that the value of export rose by 33.76% YoY, posting USD18.6 bn, while the import value also moves up by 26.08% YoY, recording USD18.5 bn. However, after adjusting the reverse Tet-effect, the export and import values turned to decline by 3.14% YoY and 8.70% YoY, respectively. These figures were likely to indicate that the COVID-19 epidemic already but not fully effected to trade activities in this month.

According to the GSO estimate, the total trade value fell sharply by 12.08% YoY to reach USD38.1bn in January 2020. In particular, the value of export declined by 13.93% YoY, posting USD19.0bn, while the import value also decreased by 10.16% YoY, recording USD19.1bn. Tet holiday in January 2020, which was not only long but also extended, was the probable reason for the plunge in trade activity.

Real GDP decelerates in 4Q2019. GSO estimates the real GDP in 4Q2019 to reach VND1,214trn, growing 6.97% YoY, 34 basic points (bps)-lower than the growth rate in 3Q2019. Cumulatively, 2019 real GDP grows 7.02% YoY, 22bps-higher than 6.8% target stated in the Government Resolution 01/NQ-CP 2019.

According to GSO estimates, total trade value increased by 4.51% YoY to reach USD45.1bn in November 2019. In particular, the value of export increased by 3.77% YoY to USD22.6bn, while the import value rose by 4.52% YoY to achieve USD22.5bn. As a result, the trade balance recorded a deficit of USD100mn in the trade balance.

According to GSO, total trade value increased by 1.30% YoY to reach USD44.9bn in October 2019. In particular, the value of export declined 0.79% YoY to USD22.4bn while the import value increased 3.47%YoY to achieve USD22.5bn, resulting in a deficit of USD100mn in the trade balance. We estimate export to grow 13.78% YoY and import to grow 12.57% YoY in Nov 2019.

Vietnam real GDP in 3Q2019 was estimated to post VND957.1trn, growing 7.31% YoY and 58 basis point higher than that of the previous quarter. Industry and construction sector and services sector improved significantly while agriculture, forestry and fishery sector performed poorly.