News Bulletin 72 - Week 3, July 2021

Vietnam extended Directive 16 lockdown for another two weeks, with most of southern Vietnam impacted by the directive. Hanoi is also in a very restrictive lockdown again after re-opening just three weeks ago. In the past couple of days, Vietnam broke all daily Covid-19 recovers with new cases now reaching up to 6,000 a day, which is triple the cumulative cases in all of 2020.

HSBC expects Vietnam’s economy to face challenges related to foreign exchange and interest rates in the second half of this year.

Ngo Dang Khoa, head of global markets at HSBC Vietnam, said recent outbreaks of Covid-19 have sparked worries about production being interrupted for a long time, which would affect the country’s recovery.

"With many industrial parks being closed down and social distancing prolonging, growth momentum in the third quarter in particular will surely face many challenges."

The past week highlight:

Radical solutions needed to restructure economy

According to the General Statistics Office of Vietnam under the Ministry of Planning and Investment, Gross Domestic Product (GDP) in the second quarter of 2021 increased by 5.64%. According to several experts this was unexpected good news. However, the current economic picture is indicating both good and bad signs, conveying much uncertainty and worry.

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Let’s look at some other related financial and business news during the past week

1. HCMC to partly reopen two wholesale markets

Two out of three wholesale markets in HCMC are set to be partly reopened soon to meet rising demand for supplies.

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2. Vietnam to tighten grip on social media livestream activity

Vietnam's government is seeking to increase scrutiny of livestream content on social media such as Facebook (FB.O) and Google (GOOGL.O), in its latest move to rein in online activities it deems to be anti-state.

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3. HSBC points out three challenges for Vietnam’s economy in H2

Ngo Dang Khoa, country director of foreign exchange and capital markets at HSBC Vietnam, has suggested three challenges that the Vietnamese economy would face in the second half of this year.

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4. Business end of Covid protocols hampers firms in Covid hotspot Bac Ninh

Although enterprises in Bac Ninh, home to major foreign manufacturing plants like Samsung and Canon, have resumed operations they are finding it difficult to follow specific Covid-19 protocols.

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5. Northern Vietnam’s previous COVID-19 hotbed in hunger for factory workers

More than 340 companies in Bac Giang are seeking as many as 45,000 workers to fill up vacancies upon their operation resumption as the northern Vietnamese province has put the COVID-19 outbreak under control.

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6. Covid-19 ‘travel pass’ gives manufacturers logistics headache

The “travel pass” regulations is increasing the burden on southern manufacturers due to a lack of consistency in its implementation.

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7. Zero percent loan rate provided for enterprises to pay wages for workers

Deputy Director of Ho Chi Minh City Bank for Social Policies Bui Van Son, on July 13, informed that the Vietnam Bank for Social Policies has started receiving applications for enterprises, who want to borrow money to pay wages for work stoppage and production restoration, according to the support package of VND26 trillion of the Government.

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8. Vietnam expects to raise 120 trillion VND worth of G-bonds in Q3

The State Treasury recently announced a plan to auction Government bonds worth of 120 trillion VND (5.21 billion USD) via the Hanoi Stock Exchange in the third quarter.

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9. Prices rise on many essential products in Mekong Delta amid social distancing

The rising incidence of COVID-19 has led many localities in the Cuu Long (Mekong) Delta region to adopt social distancing.

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10. Making public investment a driving force of Vietnam’s economy

Public investment will focus on important and key industries and sectors of the economy, of which economic sectors account for more than 71%

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