Workers produce garment products for export (Photo: VNA)Hanoi (VNA) - The World Bank (WB) has issued an update onVietnam’s macro-economy for May, in which it said the economy may prosper againafter social distancing measures were eased nationwide on April 23.
The WB noted that after posting GDP growth of 3.8 percent in the firstquarter of this year, Vietnam’s economy then showed signs of recession inApril, when the index of industrial production fell 13.3 percent month-on-month- the sharpest decline ever. Retail sales fell 9.6 percent year-on-year asconsumers encountered many changes and travel restrictions. Meanwhile,passenger and goods transport contracted 27.5 percent and 7.2 percent, respectively.
It also cited the General Statistics Office (GSO)'s data as reporting that employmentin the processing and manufacturing sector was affected most by the COVID-19pandemic (1.2 million jobs influenced in Q1), followed by wholesale and retail(1.1 million jobs) and accommodation (740,000 jobs).
Exports grew by an estimated 4.7 percent year-on-year between Januaryand April compared to 6.5 percent in the same period last year.
Committed FDI reached 12.3 billion USD in the first four months, down 15.5percent year-on-year. Registered FDI surprisingly rebounded in April, by 81percent month-on-month and 62 percent year-on-year, according to the WB.
Credit growth, meanwhile, bounced back in March after being stagnant in Januaryand February. The State Bank of Vietnam said credit growth in late March stoodat 1.3 percent compared to the beginning of the year and about 11 percent year-on-year.
The State Bank of Vietnam has provided aid packages since early March to allowbanks to restructure loans and cut interest rates for borrowers. It alsoconsidered support for certain commercial banks to improve liquidity viaraising credit limits so that these banks could increase loans for businessesfacing financial difficulties.
Meanwhile, Fitch Ratings has revised Vietnam’s outlook from “positive”to “stable” and maintained the country’s credit rating at BB.
The outlook revision reflects the impact of theescalating COVID-19 pandemic on Vietnam’s economy through its tourism andexport sectors and weakening domestic demand. It also demonstrates the country’sstrong medium-term growth prospects, lengthening record of macro-stability,lower government debt levels, and stronger external finances compared with its peers,including foreign-exchange reserves built up over the previous few years./.
VNA
