The US presidential election has been the spotlight of worldwide attention for the past week. While the world waits to see if Republican Donald Trump remains President for another four years or hands over the reins to Democrat Joe Biden, a former Vice President, Vietnamese experts say Vietnam will reap trade benefits irrespective of the U.S. presidential election’s outcome, but the paths will be quite different.
It’s also noticeable that at the year-end meeting of the National Assembly last week, the government is taking a cautious view in setting its development goals for 2021, which is understandable due to lingering risks from the Covid-19 pandemic.
The past week spotlight
Highlights from the year-end meeting of the National Assembly
The Vietnamese National Assembly (NA)’s year-end meeting, scheduled to last for more than three weeks from October 20 to November 17, will focus on reviewing socio-economic development in 2020 and decide important matters related to socio-economic issues and the state budget for the next year.
Due to the Covid-19 pandemic, Vietnam’s GDP is estimated to grow at 2.0-3.0% in 2020 versus a target of 6.8% for the year.
The Vietnamese government targets 6 – 6.5% GDP growth in 2021 given uncertainties stemming from the pandemic, which is lower than the rate forecast by international institutions (an average of 7.2%). Despite this cautious view, the government still aims for the prospect of the 2021-2025 period with a GDP growth rate of 6.5-7.0%, and per capita income of US$4,700-5,000 by 2025. It is also important to note that the government continues to prioritize the dual target of containing the pandemic and boosting economic growth, especially in the early years of the 2021-2025 period.
Let’s look at some other related financial and business news during the past week:
1. Vietnam to host ASEAN Business and Investment Summit 2020 next week
After 10 years, Vietnam is set to once again host the ASEAN Business and Investment Summit (ASEAN-BIS) on November 13 that will bring together over thousands of delegates from across Southeast Asia and the wider region, stated the Vietnam Chamber of Commerce and Industry (VCCI), the event organizer.
As the region’s premier annual forum with the participation of presidents, prime ministers and business leaders, it is a unique platform where ASEAN and its partners engage the private sector community to discuss the future of the region.
2. Vietnam customs revenue down by nearly 15% in Jan-Oct
Vietnam’s customs revenue in the first ten months of 2020 declined by 14.66% year-on-year to VND250.46 trillion (US$10.86 billion), or 74.10% of the year’s estimate.
The Import – Export Duty Department under the General Department of Vietnam Customs (GDVC) attributed the decline in customs revenue to the severe impacts of Covid-19 pandemic on trading activities, especially in importing machinery, auto parts, petroleum products, among others.
Meanwhile, at the time of planning, prices of crude oil were predicted to reach US$60 per barrel, but now hover around US$40 per barrel, which directly impacts customs revenue.
Vietnam will reap trade benefits irrespective of the U.S. presidential election’s outcome, but the paths will be quite different, experts say.
As the world waits to see if Republican Donald Trump remains President for another four years or hands over the reins to Democrat Joe Biden, a former Vice President, Vietnamese experts are divided on how the Vietnamese economy will benefit.
4. Vietnam PM demands no power price hike by year-end
Vietnam’s Prime Minister Nguyen Xuan Phuc has asked the industry ministry to keep electricity prices stable throughout the year-end with an aim to keep inflation below 3%.
The Ministry of Industry and Trade (MOIT) needs to direct Vietnam Electricity (EVN) for the good implementation of the prime minister’s request.
The PM has also asked ministries and localities to check the supply and demand for essential goods and the prices to apply price stabilization measures when needed, getting ready for the supply of essential goods for people in the central region (where severe floods have swept), and the supply of goods in high demand on the occasion of Christmas, New Year, and Tet holiday.
While FTAs are beneficial to Vietnamese enterprises, only foreign-invested firms so far are able to take full advantage of these trade deals, stated a senior government official.
The signing of a number of free trade agreements (FTAs) not only opens the door for Vietnam exports, but also brings fierce competition as the country is committed to opening the market for foreign goods and services.
6. Agro-forestry-fishery exports reach US$33.56 billion in ten months
The total export value of the agricultural, forestry and fishery sectors in the first ten months of 2020 reached US$33.56, a year-on-year increase of 1.1%, according to the Ministry of Agriculture and Rural Development (MARD).
Of which, the export value of the main agricultural products was estimated at US$ 15.07 billion, down by 1.6%. The value of exported livestock products was estimated at US$256 million, down 21.4%. Seafood exports were estimated at nearly US$6.88 billion, down by 2.5%. The export figure for main forest products was estimated at US$10.31 billion, up 13.3% over the same period in 2019.
7. October index of industrial production continues to rise
The index of industrial production (IIP) in October increased 3.6% from the previous month and 5.4% against the same period last year, reported the Ministry of Industry and Trade.
The ministry said that thanks to the effective control of the COVID-19 pandemic, industrial production activities during the month maintained expansion, positively contributing to the country’s economic recovery.
However, in the first 10 months of 2020, the IIP rose 2.7% over the same period last year, much lower than the 9.5% increase in the same period in 2019.
9. US claims Vietnamese tires subsidized by weak currency, imposes import duties
The U.S. has slapped preliminary countervailing duties of 6.23-10.08 percent on Vietnamese tires, alleging they are subsidized by an undervalued currency.
The duties, which apply to imported passenger vehicle and light truck tires, were announced by the Commerce Department on Thursday, after United Steelworkers, a trade union with members across North America, filed a petition in May claiming domestic production was hurt by Vietnamese products.
10. Vietnam targets fiscal deficit of 3.7% of GDP in next five years
Vietnam targets an average fiscal deficit of 3.7% in the next five years period, being around 4% of the GDP in 2021 before declining to 3.4% by 2025, according to Minister of Finance Dinh Tien Dung.
By 2025, Vietnam’s public debt is estimated at 47.5% of the revised GDP (which is 25.4% higher than current method of GDP’s calculation), or 60.4% of the level being revised, stated Mr. Dung at a hearing session at the National Assembly on November 5.
On 14 December 2020, the Government promulgated Decree No. 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code regarding labor conditions and labor relation (“Decree 145”). Such Decree provides for labor management, labor contract, labor outsourcing, dialogue at workplace, salary, working hour & rest hour, labor discipline & material liability, female employees & gender equality, domestic worker and labor dispute.
For the upcoming 2021, we are delighted to offer this “Compliance Calendar 2021” in English and Vietnamese with the hope to help enterprises not missing any important deadlines. The issues include periodic requirements of tax and labour compliance as stipulated in the latest legal documents. Please kindly find the bilingual calendar in the Downloads section below and let us know if you have any questions about the deadlines or would like assistance in meeting them.