News Bulletin 79 - Week 1, September 2021

Now going into its fifth month of social distancing directive and second month of severe lockdown, Vietnam’s economy has been severely impacted. Second half 2021 GDP numbers are down significantly with many economists projecting annual GDP growth to come in at 4% range, well down from the initial 6.5-7% projection at the beginning of the year.

Standard Chartered Bank has revised its GDP growth forecasts for Vietnam for 2021 to 4.7 per cent from 6.5 per cent and 7.0 per cent from 7.3 per cent for 2022 due to softening economic indicators, the worsening pandemic, and a still-slow vaccination rollout.  The bank anticipates a further downgrade and an interest rate cut by the State Bank of Vietnam (SBV) if COVID-19 cases are not brought under control by September. It sees a rebound in the fourth quarter and expects trade data to remain supported by improving global trade. Softer economic growth is expected in the third quarter of this year, Standard Chartered noted.

Industrial production in August was affected by the COVID-19 pandemic as many localities had to implement social distancing according to Directive No.16/CT-TTg.  Data by the General Statistics Office (GSO) reveals that the Index of Industrial Production (IIP) posted a 4.2 per cent decline in August against July and a contraction of 7.4 per cent against August 2020. In the first eight months of 2021, the IIP grew 5.6 per cent, which is 2.2 per cent higher than the corresponding figure from 2020 but much lower than the 9.5 per cent growth reported in the same period in 2019.

The past week highlight:

FDI attraction in eight months tops 19 billion USD

Vietnam reeled in more than 19 billion USD from FDI attraction in the first eight months of this year, according to the Ministry of Planning and Investment.

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

1. Vietnam's industrial production hit hard by pandemic

Industrial production in August was affected by the COVID-19 pandemic as many localities had to implement social distancing according to Directive No.16/CT-TTg.

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2. Ho Chi Minh City allows flight simulator training centers to resume operation amid pandemic

Three flight simulator training centers in Ho Chi Minh City will be allowed to resume operation during the ongoing COVID-19 social distancing period, the municipal administration has announced.

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3. Canadian businesses believe in Vietnam’s medium-term economic outlook

Canadian entrepreneurs have voiced their belief in Vietnam’s economic outlook despite the fourth wave of COVID-19 outbreaks and the adverse impacts of the pandemic on the country’s activities and momentum growth.

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4. Interest rates gradually decrease

The wave of interest rate cuts has been activated, and it is forecasted that the interest rate level will remain low from now until the end of the year to support businesses and the economy amid the context that the Covid-19 pandemic prolongs as currently.

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5. Travel permit roadblocks will disrupt operations: Hanoi firms

The wave of interest rate cuts has been activated, and it is forecasted that the interest rate level will remain low from now until the end of the year to support businesses and the economy amid the context that the Covid-19 pandemic prolongs as currently.

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6. Vietnam will not fail FDI companies’ trust in Covid battle: PM

Vietnam will not fail the trust Samsung and other foreign companies pose in its ability to combat Covid-19 despite the challenges, Prime Minister Pham Minh Chinh assured.

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7. Standard Chartered lowers Vietnam’s 2021 GDP growth forecast to 4.7 per cent

The UK-backed lender predicts Vietnam's GPD growth in 2021 to be 4.7 per cent, instead of the previous forecast of 6.5 per cent.

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8. Environmental impact report of largest FDI project in Mekong Delta approved

The People's Committee of Bac Lieu Province, on September 2, informed that the Ministry of Natural Resources and Environment (MONRE) had just approved the environmental impact assessment report of the Bac Lieu liquefied natural gas (LNG)-fired Power Plant project.

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9. Vietnam is the Next Growth Hotspot for Branded Residences

The eastward migration of wealth is creating incredible opportunities for investors, developers and world-renowned brands to tap into Asia’s demand for one of the most exciting offerings in real estate: branded residences.

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10. Agricultural exports set to reach 50 billion USD by 2025

The Ministry of Agriculture and Rural Development sets a target of earning 50 – 51 billion USD in export value of agro-forestry and fishery products by 2025 and 60 – 62 billion USD by 2030.

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