Vietnam takes strong measures to revive economy after pandemic

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There will be robust policies to revive the economy, whose key sectors the pandemic has damaged, Prime Minister Nguyen Xuan Phuc said.
The government has already urged banks to provide VND300 trillion ($12.9 billion) worth of credit at low interest rates to affected businesses, he said during an online meeting with provincial and city authorities on Friday.

It has also extended the payment deadline for VND180 trillion ($7.7 billion) worth of taxes and fees, and has green-lighted a VND62 trillion ($2.7 billion) package to support unemployed and low-income people, the premier said.

More measures are on the cards to keep the economy from posting "negative growth," he noted, adding that all localities need to strive to turn difficulties into opportunities to boost the economy.

"Without drastic measures, the economy could suffer negative growth."

He instructed ministries and other agencies to quickly develop a post-epidemic economic recovery scenario, and the Ministry of Planning and Investment to draft an initial report on reviving the economy by next week.

He also instructed the ministry to collect inputs on difficulties faced by business and recommendations to boost the economy.

GDP growth in the first quarter was 3.82 percent, the lowest rate in a decade, and credit rating company Fitch Ratings has forecast 3.3 percent growth for this year, the lowest rate since the mid-1980s.

Minister of Planning and Investment Nguyen Chi Dung said Vietnam’s economy, like other countries’, has been severely affected by the pandemic.

"The longer the epidemic, the more severe the impact. Vietnam’s GDP growth target of 6.8 percent for the year will be very difficult to meet."

If the pandemic is controlled in the second quarter, growth could reach 5.32 percent, and if it is controlled in the third quarter, growth could reach 5.05 percent, he said.

It was 7.02 percent last year.

Minister of Finance Dinh Tien Dung said if GDP growth is 5.3 percent, and oil prices average $35 per barrel, the government’s revenues could fall by VND110 trillion ($4.7 billion) this year and the fiscal deficit as a ratio of GDP could increase by 1.5-1.6 percentage points from 3.4 percent last year.

The damage would be greater if GDP growth is below 5 percent, especially since the tourism, logistics and services sectors have suffered from the pandemic.