Vietnam economy shows positive signs in 7 months: PM

There have been a number of positive signs in the economy in the first seven months of 2020 as the country continues to pursue the dual target of containing the pandemic and boosting the economic recovery, according to Prime Minister Nguyen Xuan Phuc.

Overview of the meeting. Photo: VGP.

Thanks to measures stimulating domestic consumption and tourism, Vietnam’s retail sales and consumer services revenues in July grew 3.3% month-on-month and 4.3% year-on-year, PM Phuc said at a government meeting on August 3.

Notably, the country earned a trade surplus of US$6.5 billion, which is a seven-month record high in the last four years, PM Phuc stated, adding there are a number of new export markets to help Vietnam diversify external trade.

The US remained Vietnam’s largest export market with a turnover of US$37.9 billion, up 15% year-on-year, followed by China with US$23.5 billion, up 18.4%.

Another spotlight mentioned by PM Phuc is the amount of committed foreign direct investment (FDI) in July totaling US$3.15 billion, up 76.2% against June and accounting for 16.7% of total registered FDI in seven months. This showcased a recovery trend in FDI to Vietnam and the country is taking advantage from a shift in investment globally.

The PM noted that disbursement of public investment in July surged nearly 52% year-on-year as the government is pushing for the realization of 100% of the VND700 trillion (US$30 billion) target.

PM Phuc, however, pointed out three risks to the economy, of which the biggest is the complicated progression of the Covid-19 pandemic. The second is the escalation of trade and technology tensions among countries in the world, and the third one is natural disasters.

The resurgence of the pandemic is posing a significant risk to economic recovery efforts, PM Phuc stressed.

While public spending is increasing, which may lead to a wider fiscal deficit, PM Phuc requested the Ministry of Finance to continue providing support for workers and businesses.

According to the PM, a combination of fiscal and monetary policies with greater efficiency is necessary to further stimulate aggregate demand and boost economic growth.

He pointed to administrative reform as an important task to support the business community and attract more FDI to Vietnam, expecting each ministry, province/city to have a task force specialized in attracting investment capital from multinationals.

Additionally, the PM requested to accelerate the development of digital economy, e-government and e-payment, saying these are key steps to boost productivity and minimize contacts during the Covid-19 pandemic.