Economic recovery and acceleration

Foreign and domestic tourists visit Hoi An Ancient Town. Photo: Vinanet

Q2 GDP saw the highest growth in 10 years

The country's socio-economy in the first six months of 2022 takes place in the context that world economic growth is forecast to decrease after two years of being affected by the Covid-19 pandemic and the impact of the conflict between Russia and Ukraine; the price of essential goods on the world market increased sharply, especially the price of crude oil, natural gas and liquefied natural gas, which has seen the highest increase since 2011, causing the risk of an energy security crisis and putting great pressure on global inflation.

In the country, along with the implementation of support packages for economic recovery and growth and the control of the Covid-19 pandemic, production and business activities have returned to a normal state.

Accordingly, our country's socio-economic development in the first six months of 2022 has risen in most industries and fields. Some industries had higher growth rates before the pandemic such as the processing and manufacturing industry; total retail sales of consumer goods and services; and exports of goods.

According to data announced by the General Statistics Office, the gross domestic product (GDP) in the Q2 of 2022 was estimated to rise by 7.72% year-on-year, higher than the growth rate of Q2 in years from 2011 to 2021.

Generally, in the first six months of 2022, GDP grew by 6.42%, higher than the growth rate of 2.04% in the first six months of 2020 and the growth rate of 5.74% in the first six months of 2021.

Industrial production recorded good growth because the production and business activities of the enterprises have been maintained and recovering. The industrial production index increased by 8.7% year-on-year. Total retail sales of consumer goods and services in six months reached VND2,717 trillion, up 11.7%, higher than the same period in the last five years; up 14.4% compared to the first six months of 2019 – the year before the Covid-19 pandemic.

In the first half of 2022, the total trade in goods reached US$371.17 billion, up 16.4% year-on-year; of which exports rose by 17.3%; imports rose by 15.5%. Vietnam had a trade surplus of US$710 million.

Ms. Nguyen Thu Oanh, Director of the Price Statistics Department (General Statistics Office), said the domestic petrol price has soared according to the world fuel price; the increase in the price of essential consumer goods and services is in line with the price of input materials and transportation costs are the main reasons why the consumer price index (CPI) in June 2022 increased by 0.69% compared to the previous month. On average, in the first six months of 2022, core inflation grew by 1.25% over the same period in 2021, lower than the general average CPI (up 2.44%), which reflects that consumer price fluctuations were mainly due to food and gasoline prices.

Pressure from inflation

Along with the recovery of the economy, the business registration from January to June 2022 recorded many positive signs. About 116,900 enterprises were established and returned. According to the survey results of the business trend of enterprises in the processing and manufacturing industry, these enterprises are optimistic about their production and business situation in the third quarter of 2022 with 85% of surveyed enterprises assessing that their operations will be stable and better than the second quarter of 2022.

Assessing the economic situation in the first six months of the year, economic expert, Dr. Dinh Trong Thinh said the above results were thanks to the active and effective implementation of the Government's economic recovery programs by the ministries, agencies and localities.

Also, Dinh Trong Thinh said the results of industry growth and business performance in the first half of the year show that the business community has adapted well to the new context and policies and support of State agencies to support enterprises to restore production have promoted efficiency.

“The opening of tourism services with fast and strong growth will be a huge boost to GDP growth. The number of new businesses between January and June is higher than before, domestic investors were also assessed to bring more profits, as well as have better stability and economic growth; foreign investors still pour money into the Vietnamese market and disbursed FDI has increased, making economic activities better, as a basis for this year's GDP to reach 6.5 - 7.5%," according to Dinh Trong Thinh.

However, Dr. Dinh Trong Thinh also said that the current surge in oil prices and the increase in the price of raw materials and input materials will have an impact on inflation. Therefore, it is necessary to have a more cautious adjustment of price increases in some sectors according to regulations.

Regarding solutions for the last months of the year, Deputy Minister of Planning and Investment Tran Quoc Phuong said that in the first six months of the year, the economy recovered quickly according to a safe, flexible and effective adaptation to the Covid-19 pandemic.

Macro-economic stability continued to be maintained and inflation was under control. However, 2022 is an important year, creating a foundation for the implementation of socio-economic development goals for the 2021-2025 period, so the key tasks in the last six months of 2022 will include two groups of policies and solutions.

First, specific solutions and policies can be carried out immediately to support enterprises to restore production and business, contributing to stabilizing the lives of farmers, and ensuring national defense and security, food security; and stabilizing the lives of the poor and low-income people.

Second, solutions and policies will be carried out in the medium and long term to develop production and business, promote investment, solve the bottlenecks of the economy in terms of labor productivity, supply chains, and improve the independence and autonomy of the economy.