Vietnam’s economy has shown signs of recovery but the world is still reeling in the fight against Covid-19. As such, Vietnam needs to be well prepared for any upheaval.
Vietnam reported a GDP growth rate of 4.48 percent in the first quarter of 2021 compared with the same period last year, the same growth rate as the fourth quarter in 2020.
The World Bank (WB) said though the growth rate was still lower than that in the pre-pandemic period, it still reflects the ongoing recovery of the economy, despite the third Covid resurgence in northern provinces in February.
However, it noted that while the process is going strongly, the recovery is not equal in all business fields and the service sector remains depressed. Domestic demand has not fully recovered from the Covid-19 shock.
The institution said that Vietnam may experience new shocks or prolonged difficulties in some fields. Appropriate agencies should consider fiscal and monetary measures if the crisis continues and the national economy cannot recover as rapidly as planned.
If Vietnam can make breakthroughs in reform, it will see improvement in growth quality, and the average GDP growth rate could reach 6.76 percent per annum, according to the Central Institute of Economic Management (CIEM).
Meanwhile, the Vietnam Institute for Economic and Policy Research (VEPR) said that Vietnam is facing risks and challenges amid an uncertain global economic environment. The resurgence of Covid-19 in many countries, together with lockdowns, are prolonging the supply chain disruption, affecting the resiliency of businesses.
Geopolitical conflicts among large countries may expose economies with high openness, such as Vietnam’s, to unexpected risks.
According to VEPR, Vietnam’s economy faces internal risks, including fiscal imbalance; slow and low investment for development, especially investment in infrastructure, thus leading to low management efficiency; a vulnerable finance and banking system, despite recent improvements; heavy reliance on a foreign invested sector; lack of autonomy in technology and input materials; and low labor quality.
|According to VEPR, the most useful policies in the current situation are supply-side policies to reinforce economic fundamentals.|
However, VEPR believes that the establishment of the new Party and State apparatus, with the new government, promises a dynamic economic outlook in 2021 and afterwards.
Moreover, provided that the pandemic is controlled in Vietnam and the world’s economy begins recovering thanks to the gradual removal of blockades, VEPR predicts that Vietnam’s economy may see a growth rate of 6.2-6.3 percent this year.
V-shape recovery predicted for Vietnam
The Vietnam Chamber of Commerce and Industry (VCCI), at a ceremony on announcing the PCI 2020 (provincial competitiveness index), released a part of its special PCI 2020 survey on the impact of Covid-19 on businesses.
It said though Vietnam succeeded in controlling the pandemic in 2020, the impact on the economy, from the time of the breakout to the social distancing process, was very serious.
The PCI 2020 report said that though the administration made great efforts to assist businesses with support policies, companies still found it difficult to access the policies. Meanwhile, the support was not enough to recover the economy, because the damages caused by the crisis were very serious.
However, unlike other crises, crises caused by economic blockades can be reversed almost immediately. Vietnam’s economy, therefore, may see a V-shape recovery soon after the supply chains resume and workers are employed again.
VCCI believes that the market will recover in 2021 when consumers return to public places and demand for goods increases. Policymakers can be reassured by the fact that the government’s efforts to control the pandemic have brought positive effects. If an outbreak reoccurs, the Government’s decisions will be respected and implemented by people.
According to VEPR, as Vietnam’s international trade still relies on foreign invested enterprises, the country needs to quickly diversify FDI sources.
The container shortage around the globe and the Suez Canal traffic jam caused by the huge cargo ship Ever Given are evidence of the fragile structure of global supply chains. In the era of interwoven economies, Vietnam needs to take cautious steps when joining supply chains.
The tendency of relocating investments out of China will bring opportunities to Vietnam to diversify FDI sources and expand production capability.
According to VEPR, the most useful policies in the current situation are supply-side policies to reinforce economic fundamentals. These include policies on administrative reform and state management quality improvement, especially in localities. This will improve the business environment and benefit businesses and people.
VN-Index hits new peak on strong cash flow
|An investor watches stock information on the computer. Strong cash flow into bank and steel stocks pushed the VN-Index of the Hochiminh Stock Exchange up today, June 18, to its record of 1,377.77 points – PHOTO: VNA|
HCMC – Strong cash flow into bank and steel stocks pushed the VN-Index of the Hochiminh Stock Exchange up today, June 18, to a new record of 1,377.77 points.
At the close, the main index jumped by 17.85 points, or 1.31%, against the day earlier, with 249 winners and 138 losers. Trade volume totaled over 809 million shares worth VND23.7 trillion, up over 5% in both volume and value from the previous session.
Over 58 million shares valued at VND2.8 trillion were traded in block deals.
In the group of bank stocks, HDB, EIB, BID, MBB and TCB were in positive territory, while lender VCB made a strong rise and reported a matching volume of over 3.2 million shares.
Housing developer VHM was among key drivers of the southern bourse, improving 3.2% at the close.
Among the steel stocks, TLH and SMC shot up to their ceiling prices, while NKG, POM and HSG soared by 2.9%-5.2%.
Many small and medium stocks also became cash magnets and moved up at the end, with property group FLC maintaining its growth momentum and closing up 3.1%. FLC became the most actively traded stock on the southern market with 53 million shares traded.
Financial firm FIT was also one of biggest gainers, rising by 2% and reporting a matching volume of 30 million shares.
With 109 gainers and 84 decliners, the HNX-Index of the Hanoi Stock Exchange stood at 318.73 points at the close, inching up a slight 0.52% from the session earlier.
Among the bank stocks, NVB ended at the reference price, while SHB and BAB made a mild rise. Lender SHB also took the lead on the northern bourse by liquidity, with 16.7 million shares changing hands.
Other largecaps such as securities companies SHS and MBS and service company THD finished the day up and contributed to the growth of the index, while many steel stocks were among the best performers.
VN-Index shoots to new peak
Vietnam’s benchmark VN-Index surged 1.31 percent to 1,377.77 points Friday, a new peak, with foreign investors’ net buying value highest in 10 weeks.
The index gradually climbed throughout the day to close with a near 18-point gain, the highest of the past five sessions. It has risen nearly 25 percent this year.
Trading value on the Ho Chi Minh Stock Exchange (HoSE), on which the index is based, rose 5.4 percent to VND23.7 trillion ($1.03 billion). The bourse saw 249 tickers gain and 138 lose.
Foreign investors turned net buyers on the main bourse to the tune of VND646 billion, the highest since April 9. Strongest buying pressure was seen in PDR of Phat Dat Real Estate Development and HSG of steelmaker Hoa Sen Group.
The VN30 basket, comprising the 30 largest capped stocks, saw 22 tickers in the green, led by TCH of real estate company Hoang Huy Investment Financial Services with 5.9 percent.
It was followed by VCB of state-owned lender Vietcombank, up 4.1 percent to a new peak. The ticker contributed most to VN-Index’s gain this session, pushing it up by 4.4 points.
MSN of conglomerate Masan Group rose 3.4 percent. It is still struggling to return to its previous peak on May 26.
Other strong gainers include VHM of real estate giant Vinhomes, up 3.2 percent, and PNJ of Phu Nhuan Jewelry, up 2.6 percent.
On the losing side BVH of insurance company Bao Viet Holdings led with a 1.6 percent drop, followed by GAS of state-owned Petrovietnam Gas, down 1.3 percent.
The HNX-Index for stocks on the Hanoi Stock Exchange, home to mid and small caps, rose 0.52 percent while the UPCoM-Index for the Unlisted Public Companies Market added 0.75 percent.
Vietnam Airlines licensed to operate flights to Canada
National flag carrier Vietnam Airlines has received a Foreign Air Operator Certificate (FAOC) issued by the Transport Canada, allowing it to operate flights to the North American country.
The FAOC took effect on June 11 with unlimited time and number of flights.
Accordingly, the carrier could operate flights carrying passengers and cargo between Vietnam and all airports in Canada. The earliest flight is scheduled to take off on June 30.
Vietnam Airlines is the first carrier in Vietnam to receive Canadian authorities’ permit to run flights to the country.
The carrier is building a plan to conduct flights between the two nations, with Toronto and Vancouver as its major destinations.
With a total distance of over 20,000km and two-way flight time of over 30 hours, the airliner will use wide-body aircraft Boeing 787 and Airbus A350 for the service.
Earlier, it received the FAOC for the first time which was valid from July 13 to October 13, 2020 and extended till November 15, 2020./.
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