Logo of Phnom Penh Post newspaper Phnom Penh Post - Vietnam’s economy unexpectedly expands

Vietnam’s economy unexpectedly expands

Content image - Phnom Penh Post
Manufacturing and processing was the driving force of the economy in the first six months with an expansion of 4.96 per cent. VIETNAM NEWS AGENCY/VIET NAM NEWS

Vietnam’s economy unexpectedly expands

Vietnam's gross domestic product (GDP) expanded 1.81 per cent year-on-year during the first half of this year, the lowest six-month growth pace since 2011, data from the General Statistics Office (GSO) show.

GSO deputy director-general Nguyen Thi Huong told a press conference on Monday: “As the government prioritised the fight against the Covid-19 pandemic over economic growth, a positive growth rate in January-June still indicates strong efforts of both the government and society to maintain business operations while combating the Covid-19 pandemic.”

The International Monetary Fund (IMF) slashed its 2020 world economic growth forecast further last week as the Covid-19 pandemic had greater damage to economic activity than initially predicted.

The IMF said it expected the global economy to recede by 4.9 per cent compared to a three per cent contraction previously forecast in April, adding that this prediction is much worse than during the 2008-2009 financial crisis.

The organisation also forecast sharp declines in GDP of large economies this year, with minus eight per cent for the US’ GDP, -10.2 per cent for Europe, -7.8 per cent for Germany and -12.5 per cent for France.

The fund, however, has forecast Vietnam’s economy to grow 2.7 per cent this year, the highest in Asia.

Huong said that amid the gloomy forecasts for global economic growth, the positive GDP result for Vietnam had shown the determination and efforts of the country’s whole political system in the fight against pandemic and its priority for people’s health and lives, even at the expense of economic benefits.

She said: “This is a solid foundation for the Vietnamese economy to sustain growth and avoid contraction. The data show all-level authorities, enterprises and people’s success in concurrently combating the pandemic, maintaining production and business activities, and gradually bringing the economy to the pre-pandemic status.”

GSO reported on Monday that in the second quarter, Vietnam’s GDP rose by just 0.36 per cent year-on-year, which was the lowest since quarterly records began in Vietnam 30 years ago, said System of National Accounts Department director Duong Manh Hung.

This was attributed to the economy being hit hardest by the Covid-19 pandemic in the second quarter, when the government ramped up social distancing measures, the GSO said.

It added that the agro-forestry-fisheries sector grew 1.72 per cent, industry-construction rose 1.38 per cent, while the services sector contracted 1.76 per cent between April and June.

In the January-June period, agriculture, forestry and fishery increased by 1.19 per cent (contributing 11.89 per cent to overall growth), industry and construction rose by 2.98 per cent (contributing 73.14 per cent) and the service sector climbed by 0.57 per cent (contributing 14.97 per cent).

Manufacturing and processing was the driving force of the economy in the first six months with an expansion of 4.96 per cent, along with wholesale and retail with a growth rate of 4.3 per cent, as well as finance, banking and insurance with 6.78 per cent.

Two months after the end of social distancing in Vietnam, economic activities have gradually returned to normal and led to a surge of 27.9 per cent month-on-month in new business formations to 13,700 in June, said the GSO.

June also witnessed a sharp month-on-month increase of 23.4 per cent in combined registered capital to 139.1 trillion dong ($5.97 billion). Employees recruited by new enterprises rose 9.4 per cent to 100,000.

However, the number of newly-established enterprises in the first six months was more than 62,000 with registered capital of a combined 697.1 trillion dong, down 7.3 per cent in number and 19 per cent in value year-on-year.

Average registered capital per newly-established enterprise was 11.2 billion dong during this period, down 12.5 per cent year-on-year.

The GSO noted that 25,200 enterprises resumed operations, up 16.4 per cent against the comparable period last year, bringing the total number of newly-registered and reinstated enterprises in the six-month period to 87,200, down 1.5 per cent year-on-year.

During this period, the number of enterprises that temporarily ceased operations surged 38.2 per cent year-on-year to 29,200.

The number of enterprises which completed procedures for bankruptcy fell five per cent to 7,400.

CPI rises 0.66%

Meanwhile, the country’s consumer prices in June climbed 0.66 per cent compared to May and up 3.17 per cent compared to the same period last year.

The GSO’s Huong said seven out of 11 key commodity and services groups posted increases, of which, transportation saw the highest increase as the prices of petroleum products climbed after a long losing streak since the Lunar New Year and the prices of pork continued to escalate in early June.

The Consumer Price Index (CPI) in the second quarter of this year fell 1.87 per cent compared to the previous quarter and surged 2.83 per cent compared to the same period last year.

In the first six months of this year, the average CPI jumped 4.19 per cent year-on-year. This is the highest level recorded from 2016 to 2020.



  • PM to vet NY holiday dates

    The Ministry of Economy and Finance submitted a letter to Prime Minister Hun Sen asking him to formally set a five-day national holiday from August 17-21 to make up for the Khmer New Year holiday in April that was postponed. Finance minister Aun Pornmoniroth sent

  • Cambodia rejects UN rights claim

    Cambodia's Permanent Mission to the UN Office in Geneva on Friday hit back at David Kaye, the UN special rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression after he raised concerns over the repression of free speech and

  • Snaring may spawn diseases

    The World Wildlife Fund (WWF) has warned that snaring of animals has become a crisis that poses a serious risk to wildlife in Southeast Asia and could spawn the transmission of zoonotic diseases to humans. Its July 9 report entitled Silence of the Snares: Southeast Asia’

  • Ex-party leader, gov’t critic named as secretary of state

    A former political party leader known for being critical of the government has been appointed secretary of state at the Ministry of Rural Development, a royal decree dated July 9 said. Sourn Serey Ratha, the former president of the Khmer Power Party (KPP), told The Post

  • Residence cards set for over 80,000 immigrants

    The Ministry of Interior plans to grant residence cards to more than 80,000 immigrants to better keep track of them. The ministry announced the plan on July 10, following the results of an immigration census. “An inter-ministerial committee and many operational working groups have been set up

  • Kingdom produces PPE gear

    Medical supplies from Cambodia have been donated to member countries of the Asian Development Bank (ADB) to assist in the fight against Covid-19, said an ADB report published on July 9. The report stated that the supplies were donated as a response to global efforts to

  • Kingdom, US vow stronger ties

    At an academic forum on Saturday to celebrate 70 years of Cambodia-US diplomatic ties, Cambodian researchers and officials expressed hope of encouraging US investments and for that country to deepen and improve its bilateral relations. Held at the Royal Academy of Cambodia, it reviewed the past 70

  • ‘Single Portal’ integrated registration system welcomes nearly 50 firms

    Forty-seven companies have successfully registered via a newly-launched information technology e-business registration platform as of the end of the second week of this month, Ministry of Economy and Finance secretary of state Phan Phalla said. Six ministries and state-run institutions have been integrated into a

  • Battambang artist brings giant animals to life

    The giant reptile’s gaping mouth appears ready to consume its latest victim. It stands taller than a person and is incredibly life-like with authentic colours, a long spiky tail and detailed scales adorning its entire body. If it wasn’t 13m long, you may

  • Fifteen Cambodians from Saudi get Covid-19

    The Ministry of Health on Sunday confirmed 15 more imported cases of Covid. The 15 men ‒ all Cambodian aged 21 to 33 ‒ arrived from Saudi Arabia on Friday via a connecting flight in Malaysia. They were travelling with 79 other passengers, three of them women. The ministry said 80 of the