Viet Nam to post high economic growth in six months despite COVID-19

Update: 13:19 | 04/07/2021
Despite impacts from two waves of COVID-19 outbreaks in the first half of this year, especially on industrial hubs, Viet Nam still posted gross domestic product (GDP) growth of 5.64 percent and its export revenue rose 28.4 percent over the same period last year.
Hóa giải thách thức phủ bóng lên nền kinh tế
lIllustrative image (Source: VNA)

Although the GDP expansion was lower than the target set by the Government, it was much higher than 1.82 percent recorded in the same period last year.

This showed the effective policies, strategies and directions from the central to local levels with the implementation of “dual targets” of controlling the pandemic and ensuring socio-economic development at the same time.

At a national conference on COVID-19 prevention and control held recently, Prime Minister Pham Minh Chinh asked sectors and localities to apply measures to prevent the pandemic with priority given to the protection of people’s health and maintaining production. The standpoints have been persistent right from the beginning of the pandemic outbreak. Through each wave of COVID-19, Viet Nam has made flexible adjustments in its strategy to respond to the pandemic.

Taking people as the centre of policies and the dual targets as the motto for actions, resolutions and documents issued by the Party, National Assembly and Government daily have shown efficiency in controlling the pandemic and boosting socio-economic development. Thanks to the directions, GDP growth in the first quarter of this year rose strongly, at 4.48 percent, compared to 3.82 percent in the same period last year.

Amid the complicated developments of the pandemic, PM Chinh affirmed that Viet Nam does not choose the easy responding measures that may affect people’s lives and socio-economic development. The country only applies lockdown measures in pandemic-hit areas and social distancing in high-risk areas, ensuring the maintenance of normal activities. Meanwhile, vaccination is considered a long-term, decisive and strategic solution to overcome the pandemic, he said.

According to the PM, as an open economy, Viet Nam cannot close its door for a long time, and the risk of COVID-19 penetrating from the outside cannot be absolutely prevented. Therefore, the success of the vaccination scheme will be of great significance and the most effective solution to deal with the pandemic and reach herd immunity, paving the way for Viet Nam to catch up with the development trend in the world.

Currently, Viet Nam is working hard to speed up the vaccination scheme towards the target of reaching herd immunity in late 2021 or early 2022. Along with the vaccination efforts, Viet Nam will also strive to complete the growth target of 6.5 percent set for this year.

Country Director of the Asian Development Bank in Viet Nam Andrew Jeffries held that Viet Nam has sufficient conditions to realise the dual target of preventing the pandemic and boosting economic growth at the same time.

Meanwhile, economist Dinh Trong Thinh from the Academy of Finance asserted that in the rest of the year, Viet Nam’s import-export activities will benefit from higher demand in the world, which will boost the country’s growth.

However, experts held that in order to reach the target of 6.5 percent this year, Viet Nam will have to overcome great challenges from the slow disbursement of public investment due to COVID-19 impacts and a surge in prices of input materials.

In order to boost production and business expansion in the rest of the year, the Ministry of Planning and Investment has proposed to the Government a number of policies to support COVID-19-hit enterprises, including the expansion of groups of beneficiaries from interest rate cut to enterprises in aviation, tourism, hospitality, transport sectors, along with the reduction of loan interest rates by 3-5 percent and the restructuring of debts as well as the maintenance of debt group classification and creating new loans.

As part of efforts to implement the directions of the Prime Minister, the Ministry of Labour, Invalids and Social Affairs has finalised a draft resolution on policies to support employers and employees meeting difficulties due to the COVID-19 pandemic, with the total aid worth more than 27.3 trillion VND (nearly 1.2 billion USD).

At the same time, the Ministry of Finance on June 24 also issued a circular on the continued cutting of 29 types of fees as applied in 2020 and the first half of 2021, as well as additional one type of fee in agriculture.

In terms of capital, Deputy Governor of the State Bank of Viet Nam Dao Minh Tu said that the bank will direct the credit system to focus on production and closely control the credit for risky areas. The bank will continue to apply measures to remove difficulties in bank credit access, thus creating favourable conditions for enterprises and people in borrowing loans from banks, he added.

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(Source: VNA)