Seizing opportunities for economic recovery

Dr. Le Duy Binh - Economist, Director of Economica Vietnam

Mr. Binh also emphasized that the gradual economic reopening within a safe range, gradually returning economic space to businesses, business households and workers will help the economy soon stabilize again. The reduction in costs for businesses should be prioritized. Because, in the past time, due to the impact of the COVID-19 epidemic, businesses must finance a lot of extra costs such as COVID-19 test costs, costs for three-on-site production, etc.

In the production recovery post-epidemic, besides cut of unnecessary costs, businesses will need other support policies, sir?

That's right, support policies not only include cost-cutting, but also financial support. Along with that, I think that the biggest support for businesses today is to return and expand economic space for businesses while ensuring safety against the epidemic.

Anti-epidemic measures must be scientific, flexible, and proportionate to avoid destroying the space for economic development. Local authorities should consider withdrawing some rigid and stereotyped anti-epidemic measures that have caused difficulties for people and businesses. Ministries and sectors should also study and review unreasonable regulations. Because many regulations have caused adverse impacts to the production and business of enterprises.

Regarding business support, there are currently 2 points of view, one thinks that support policies should be fair, while another opinion said that priority should be paid to support businesses/sectors that have leading nature or coronavirus-hit businesses. What is your opinion on this matter, sir?

I am inclined to the second point of view. In fact, there are sectors that are not too affected by COVID-19 such as e-commerce, trade in essential goods such as rice, milk, etc. may need no support. Meanwhile, many sectors that have suffered heavy losses such as tourism, aviation, etc., need strong support.

The same goes for social security policy. We should give priority to vulnerable people as well as those who have lost their jobs amid COVID-19. Then, support will be offered to those who have had their jobs and incomes reduced due to the epidemic. I still want to emphasize that every support policy needs to have a certain focus to ensure its effectiveness.

The impact of the 4th COVID-19 pandemic on Vietnam's economy is enormous. How do you think about GDP growth by the end-year?

The Vietnamese economy has faced many difficulties by the end-year. The recent economic indicators showed a deceleration in growth in industrial production, services, agriculture sectors.

Public investment capital was only disbursed by half while we have passed three-quarters of the year. Not only taking away business opportunities, but the 4th wave of epidemics has also caused business costs to skyrocket. The business performance and productivity of the majority of enterprises are therefore affected.

Some provinces, cities might still pursue a zero-covid strategy, but some provinces need to consider anti-epidemic measures to gradually return business spaces for both the formal and informal sectors, even in cased of positive cases in their locality.

Returning economic space to businesses and household businesses will help the economy stabilize soon.

In your opinion, what important motivations can we expect in the last months of this year?

While the Southeast provinces and the Mekong Delta have faced many difficulties, many other provinces are maintaining high GRDP growth, even increasing labor recruitment, such as Hai Phong. Phong, Bac Ninh, Quang Ninh, and many other provinces. These provinces have been seen as the driving force to GDP growth this year.

We can expect a sharp increase in demand from the global market for Vietnam exports in the coming months, especially from European, American, and Japanese markets at Christmas, and then from China, South Korea, and some other countries around the Lunar New Year.

Domestic consumption is also expected to rebound if the epidemic is controlled or social distancing measures are eased. Stronger disbursed public investment also contributed to GDP growth.

The rise in realized FDI flow or private investment is important for GDP growth and strengthens the confidence of domestic and foreign investors.

However, these driving forces might only be brought into full play if we managed to control the epidemic, or we take measures to safely restore production and business, and build an effective model of living with COVID-19.

Thank you!