September 20, 2020 21:53

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Concerns about economic growth in 2020

14:15 | 13/08/2020

VCN- Do not let the economy be broken is the Government's goal in the second outbreak of the Covid-19 pandemic. However, this is a very difficult time to say anything because the economy's variables are constantly changing due to the complexity and unpredictability of the pandemic.

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Economic activity this year does not depend on the desires and efforts of enterprises and the Government, but also depends on the objective developments of the pandemic aroundthe world and in the country Photo: Ha Phuong

Do not disrupt the economy

The resurgence of Covid-19 has come true. When the economy has not been out of the losses and difficulties caused by the first outbreak of the Covid-19 pandemic,enterprises werestruggling to survive, so the return of Covid-19 is really a blow inthe economy in the early stages of recovery.

In fact, the economy has shown positive signs, before the outbreak at the end of July. The retail sales of goods and services in July continued to recover, up 3.3% compared to the previous month and up to 4.3% over the same period last year thanks to consumer demand and domestic tourism.

The highest trade surplus in the past four years with the bright spot is the domestic economic sector. The United States was Vietnam's largest export market in seven months with a turnover of $37.9 billion, up 15% over the same period last year, followed by China with $23.5 billion, up 18.4%.However, outbreaks again lead to the risk of reversing the economic recovery.

Previously, in the report on the socio-economic situation in the first six months of the year, the Ministry of Planning and Investment (MPI) warned that if there is a second wave of Covid-19, its impact on the economy would bevery formidable. The indexes and results will suffer.

Facing the complicated situation of the pandemic, the Prime Minister pointed out that the outbreak can threaten the economic recovery process. Accordingly, the head of the Government directed thecontinuation of measures so asnot to disrupt the economy, keep macro balance, curb inflation, especially to keep the major balances of the economy.

In fact, the economy in general still faces many difficulties and risks, requiring great efforts of enterprises and the Government in completing the supply chain and production.

According to a company specializing in the production of footwear for export, there is not only a lack of raw materials for production, but exports of enterprises have significantly decreased in recent years. To compensate, enterprises turned to produce goods for the domestic market but currently there islow demand. Therefore, the produced products cannot be sold immediately, leading to stockpiling and enterprises facing many difficulties.

The supply chain of the textile and garment industry was interrupted, facing many difficulties in the context of widespread Covid-19, making raw materials of many enterprisesfacedifficulties.The representative of the Garment Corporation said the bottleneck of the textile industry is the supply chain, that is weaving, so it is necessary to increase investment in weaving and dyeing to complete the supply chain from yarn and textile to garment.

According to economist Assoc. Dr. Pham The Anh, anti-fracture economy is anti-fracture in production, business and consumption. When the Covid-19 pandemic happened, not only consumption was broken, but production and business activities stalled because the input supply chain was also broken. This expert said that businesses must adapt to this, and must investment to gradually improve the supply chain, avoiding similar shocks in the future. But he also emphasized that the difficulty is this takes time, and cannoy be resolved in a few months.

Minimizingimpacts on the economy

Commenting on the negative impact of thesecond outbreak of Covid-19, Assoc.Prof. Dr. Nguyen Khac Quoc Bao, University of Economics Ho Chi Minh City, said that the economy will find ithard to endure an additional shock of second social distancing. The economic consequences can be devastating, like a person who has just had a serious illness, is struggling and is beaten down by a reinfection. He fears the implications behind the economic recession or negative growth and the ability to recover from the pandemic will be extremely difficult because the important economic motivations will likely be eliminated and it will take a long time for the economy to regain growth momentum.

“More than 6% of this year's GDP, approximately $20 billion, is likely to be blown away, plus huge amounts of anti-epidemic budgets will put enormous pressure on fiscal and other macro balances. The economic problem at that time was not about calculating basic growth scenarios, but how to avoid breakdowns and keep the system safe,” saidAssociate Professor, Dr. Nguyen Khac Quoc Bao.

At the same time, the key point at the moment is finding a vaccine and spreading it to the community. When this happens, investment, production, and spending will explode.Delayed projects will be restored, domestic consumption will increase rapidly. However, the factors such as stimulating domestic consumption, boosting public investment, social assistance policieswill ensure that the economy does not fall into negative growth or breakdown in some manufacturing industries.

The economic recovery scenarios are entirely dependent on how fast or slow the vaccine can be found. Therefore, the most optimistic economic outlook at the moment is that this year Vietnam will not fall into negative growth.

Talking about the impact of the second Covid-19 wave on the economy and the Government's countermeasures, Deputy Minister of Planning and Investment MrTran Quoc Phuong said there was a difference between the secondoutbreakof Covid-19 to the economy compared to the first wave of the year. Accordingly, during the first outbreak of Covid-19, the Government applied social distancing, many economic activities, production and business were affected and as a result, GDP growth in the second quarter was only over 0.3%. However, inthe second outbreak, the way to do this would be to localize the pandemic and find ways to stamp out the pandemic in the area in order to achieve the dual goal of fighting the pandemic and economic development. This approach is expected to significantly reduce the impact on the economy, because except for pandemic zones, other regions still have normal economic development.

In the current context, many people believe that it is difficult to predict how much economic growth will be in 2020, because the pandemic's evolution is difficult to predict. Positive economic growth is the goal that Vietnam has set, and it will be a great achievement in adifficult context.

Assoc.Prof. Dr. Pham The Anh said we should not put too much emphasis on the issue of how many percent growth, or give a specific growth figure this year, because economic activities this year not onlydepend on the desires and efforts of enterprises and the Government, but also depend on the developments of the pandemic aroundthe world and in the country.The important goal is to try to minimize the negative impact of Covid-19 on the economy, minimizing the breakdown in the economy.

“Minimizing economic faults and creating a foundation for the resilience of the economy after the Covid-19 period. How much economic growth is achieved depends on many factors, we cannot control it,”said economist Pham The Anh.

By HoaiAnh/Quynh Lan