Economy growing strongly on back of COVID-19 endgame

Efforts to boost business and production fuelled by the gradual use of COVID-19 vaccines have helped recover the country’s economic growth, driven largely by the manufacturing and processing activities.

State-owned Vietnam Oil and Gas Group (PetroVietnam) last week reported that its total revenue in the first three months of the year is estimated to be over VND113 trillion ($4.91 billion), down 6 per cent on-year. However, the group’s revenue from industrial activities increased 2 per cent, and that from the service activities decreased 21 per cent on-year.

A number of the group’s products which were consumed in the first quarter witnessed an on-year rise, including fertiliser (7 per cent), liquefied petroleum gas (29 per cent), condensate (12 per cent), and assorted petrols (5 per cent).

Despite a reduction of $446.5 million or 18 per cent in export turnover, the total import turnover in the period hit $198.9 million, up 17 per cent on-year – in which liquefied natural gas imports climbed 296,700 tonnes, up 6 per cent on-year.

In the context of external demand decreasing due to negative impacts of the pandemic, these figures from PetroVietnam showed that its industrial activities are gradually bouncing back.

The situation can be seen clearer at Electricity of Vietnam (EVN), which last week also reported that all of its activities are ascending on-year in the first quarter of 2021.

Specifically, EVN’s total gross industrial output is estimated to stand at VND52.83 trillion ($2.3 billion), up 3.18 per cent on-year. The produced and purchased electricity volume is 55.45 million kilowatt hours, up 1.16 per cent. Commercial electricity totalled 50.79 million kWh, up 3.18 per cent.

In which, electricity for agro-forestry-fishery accounts for 3.97 per cent of total electricity consumed, while the rate is 56.01 per cent for construction and industrial activities, 31.46 per cent for households – all is up against the same period last year.

Notably, EVN’s total revenue from power sales is estimated to be over VND94 trillion (over $4 billion), up 4.11 per cent on-year.

Petrol and electricity are vital to production activities, especially manufacturing and processing which create 80 per cent of Vietnam’s industrial growth – the key growth pillar of the economy.

Economy growing, COVID-19, Economy growing, COVID-19

The government last week reported that despite numerous difficulties, the economy’s production and distribution of electricity increased 4.5 per cent on-year. Also, the first-quarter manufacturing and processing industry grew 9.45 per cent, higher than the on-year climb of 7.12 per cent in the same period last year.

“All of these figures showed that the first-quarter economy has been strongly bouncing back with the gradual popularity of vaccination against the COVID-19 pandemic,” said Prime Minister Nguyen Xuan Phuc at last week’s cabinet meeting, also the last one in the 2016-2020 tenure of the government. “The confidence of enterprises has continued climbing, with them gradually resuming their normal activities. This has contributed to our relatively impressive economic growth in the first three months.”

The economy grew 4.48 per cent on-year in the first quarter of this year, higher than the on-year rise of 3.68 per cent in the same period last year. In which the on-year growth rate was 3.16 per cent for the agro-forestry-fishery sector, 6.3 per cent for the construction and industrial sector, and 3.34 per cent for the service sector.

As of March 23, the total registered foreign investment hit $10.13 billion, up 18.5 per cent on-year. Total disbursement in the first quarter is estimated to be $4.1 billion, up 6.5 per cent on-year.

“Vietnam has become a safe destination for investment,” said Mai Tien Dung, Minister, Chairman of the Government Office at last week’s government press conference. “Many international organisations have applauded the great potential of the economy’s growth for 2021, such as HSBC (7 per cent), International Monetary Fund (6.5 per cent), International Finance Corporation (6.5 per cent in the 2021-2026 period), and Moody’s (changed Vietnam’s economic outlook to ‘positive’ from ‘negative’).” “According to their assessments, Vietnam’s economy will continue witnessing a brighter outlook as many nations are applying massive vaccination programmes against COVID-19,” he said.

According to global data analyst and provider FocusEconomics, this year, Vietnam’s industrial production should pick up pace from 2020’s slowdown as economic activity recovers in key international markets.

“Moreover, the underlying strength of Vietnam’s industrial sector remains intact despite COVID-19: Vietnam is an attractive low-cost base for manufacturing firms, including those looking to relocate from China due to the US-China trade tensions,” FocusEconomics told VIR in a statement.

FocusEconomics estimates that industrial output will grow 8.3 per cent in 2021 and 7.3 per cent next year. “Our panelists expect Vietnam’s GDP to expand 7.4 per cent in 2021, and 6.9 per cent in 2022.”

According to the ASEAN+3 Macroeconomic Research Office (AMRO), a regional macroeconomic surveillance organisation based in Singapore, Vietnam’s economic growth slowed to 2.91 per cent in 2020 due to the pandemic but is expected to rise to 7 per cent in 2021.

“The rebound is expected to be underpinned by a recovery in external demand, a resilient domestic economy, capital inflows, and increased production capacity,” said AMRO lead specialist Seung Hyun Luke Hong.

Joseph A Perucca - Overseas operational director, GIVI Vietnam

Economy growing, COVID-19, Economy growing, COVID-19

We welcome the positive GDP figures and export growth figures in this first evaluation, but the impacts of COVID-19 may still hold some surprises.

Being stuck inside the country without the possibility of starting any interpersonal relationship across the border, both of professional training and on a direct commercial level, would create a serious disadvantage and serious damage to companies hosted in Vietnam, especially towards other neighbouring Asian markets like China, which is already providing vaccinations to allow residents freedom of movement across the border.

I hope that with the same wisdom in containing this pandemic, the Vietnamese government will make the most appropriate decisions based on the circumstances, and that in the next quarter Vietnam will continue to work on its objectives.

Majo George - Lecturer and researcher, School of Business and Management, RMIT University

Economy growing, COVID-19, Economy growing, COVID-19

Many steps have been taken by the government to keep Vietnam’s GDP on track during this difficult time.

Although some sectors such as smartphones, electronics, and agro-forestry-fishery has shown an increasing trend in the first quarter of 2021, many other sectors such as fashion and textiles, mining, tourism, and hospitality have declined due to the pandemic and the difficulties it brings.

The government with the support of well-performing sectors has been able to maintain the status as a high growth rated country in the region.

Looking to the far future, Vietnam should prioritise to scale up export opportunities and at the same time take measures to attract more foreign direct investment which will assist to gain the set target of 6.5 per cent in GDP growth.

David Salt - COO, LOGIVAN Technologies

Economy growing, COVID-19, Economy growing, COVID-19

Whilst the pandemic’s effects continue to cause disruption in localised areas, the overall economy is strong and the percentage of people and businesses that are directly affected is small.

There is strong investment activity in the industrial sector. Many of our clients are scaling up their operations, constructing new factories and warehouses, and making capacity upgrades to their facilities.

Regional investors are looking to Vietnam as a country that has withstood the pandemic well and has an increasingly safe and attractive business environment. But I feel Vietnam’s excellent reputation is limited to the Southeast Asian region. The UK and European news surrounding COVID-19 typically centres on countries that have controlled the virus poorly, especially in the Americas and Europe.

Linda Liu - Economist, Maybank Kim Eng

Economy growing, COVID-19, Economy growing, COVID-19

Vietnam’s economic recovery this year remains intact. While the most recent wave of the pandemic outbreak briefly dampened growth momentum in the first quarter, it had not derailed the recovery.

We remain positive on the exports outlook this year. Vietnam’s exports have been largely unperturbed by new coronavirus cases and lockdowns in both domestically and across major trading partners. We expect exports to continue to remain robust amid the global demand recovery.

Growth will be further supported by a revival in foreign investment. Vietnam’s participation in recently-concluded free trade agreements will further strengthen its position as an attractive production base. The slow procurement and rollout of vaccines however is a challenge and poses a key risk, especially for the services sector.

Alain Cany - Chairman, European Chamber of Commerce in Vietnam

Economy growing, COVID-19, Economy growing, COVID-19

Growth such as this in the midst of a global pandemic is a remarkable achievement. It is testament to the government’s effective handling of COVID-19, safeguarding both lives and livelihoods with effective public health measures. Strong economic growth in the last quarter builds on this success, and suggests that both companies and consumers should be optimistic about the prospects for trade in 2021.

Our members are positive about Vietnam’s trade and investment environment. Each quarter, we ask business leaders about the performance of their companies and their perceptions of Vietnam’s economic outlook in our Business Climate Index (BCI). Our most recent data, from the fourth quarter of 2020, shows that confidence has rebounded after dipping during the initial outbreak of COVID-19.

Hong Sun - Vice chairman, Korea Chamber of Business in Vietnam

Economy growing, COVID-19, Economy growing, COVID-19

Vietnam’s economic growth in the first quarter is a successful result, and many countries still report lower growth. With this result, we expect better prospects in the second, third, and fourth quarters.

South Korean businesses in Vietnam are now in stable operation after suffering serious impacts in 2020. Aviation, tourism, and hospitality were among the areas that South Korean investors have strong interest in and have made much investment in, and are so still facing difficulties.

We expect the resumption of international flights as it is important to attract investment from South Korea and other countries. This enables investors to make the next steps. To make an investment, financiers want to make fact-finding trips to the potential location and directly meet partners to discuss potential issues.

By Thanh Nguyen

News Related

OTHER NEWS

Foreign investors net buying of VND 2,400 billion in week of 5-9 / 4 due to sudden change in put-through transactions

Foreign investors on HoSE net sold 235 billion dong by matching method. VHM was bought the most by foreign investors with 2,320 billion dong, of which over 2,170 billion dong came from put-through… Read more »

Dragon Capital bought 1.2 million HPG shares

Dragon Capital group owns nearly 200 million HPG shares, equivalent to 9,900 billion dong. HPG shares closed on April 9 at the price of 49,550 dong / share, up 10% from the end… Read more »

Approving the policy of investment in infrastructure of Hoa Lu Industrial zone

Hoa Lu border-gate industrial park covers an area of ​​348.32 hectares in two communes Loc Tan, Loc Thanh (Loc Ninh district), with an investment of 1,119.29 billion dong, of which the investor’s capital… Read more »

Gender Lens Investing a treasure trove of economic momentum

If women’s economic empowerment is improved, Vietnam’s GDP gain $40 billion a year by 2025 At the event titled Gender Lens Investing in Practice – Driving Value for Investors in Vietnam, Australian Consul General… Read more »

First-quarter growth fairly impressive

  Pham The Anh- chief economist Institute for Economic and Policy Research Economic growth was below the expectations of Resolution 01, and it was not much higher than in the same period of… Read more »

Vietnam's beer production fell 14 per cent in 2020 

The VBA Congress discussed objectives for the next five years The Vietnam Beer Alcohol Beverage Association (VBA) on April 8 held the 2021-2025 Congress to review the 2020 performance and discuss new tasks… Read more »

PetroVietnam outperforms business targets in first quarter

PetroVietnam’s first-quarter online meeting connected different locations On April 7, 2021 PetroVietnam hosted a periodical online meeting with leaders of its member units to review production and business activities in March and the… Read more »

YSVN – Banking group can lead VN-Index towards region of 1,283 – 1,300 points in April

YSVN estimates that GDP in the second quarter will increase by 6.4% and for the whole year to increase by 6.57%. The VN-Index might continue its mid-term uptrend and move towards the zone… Read more »

Apple to pay $3.4-m over iPhone obsolescence in Chile

Apple to pay $3.4-m over iPhone obsolescence in Chile (Source: freepik.com) Apple is accused of having programmed a limited lifespan into some products to force users to replace their phones sooner than necessary,… Read more »

Long road ahead for buyout offer, Toshiba board chair warns

The logo of Japanese industrial group Toshiba is seen at the company’s headquarters in Tokyo on April 7, 2021.(Kazuhiro NOGI / AFP) CVC Capital Partners is reportedly considering a 30 percent premium over… Read more »

Robust growth trends projected for investment in healthcare

Robust growth trends projected for investment in healthcare. Source: freepik.com Kim Dental, Vietnam’s largest private dental care platform, has recently raised $24 million in a series B round. The investment was led by… Read more »

Data protection receives draft fillip

Minh Nguyen, senior associate of ACSV Legal The entry into force of the European Union’s General Data Protection Regulation (GDPR) in May 2018 was a wake-up call for companies in Vietnam which have… Read more »

Local mergers and acquisitions portray businesses’ confidence

Local mergers and acquisitions portray businesses’ confidence In January, seafood processing company Vinh Hoan Corporation scooped up 51.29 per cent stake in Sa Giang Import Export Corporation. The company spent nearly $15.2 million… Read more »

Growth indicators to ensure an optimistic scenario

Processing has been a key driver for strong recovery. Photo: Le Toan Deputy Minister of Planning and Investment Tran Quoc Phuong said, “The growth rate of the first quarter at 4.48 per cent… Read more »

Warrant market April 9, 2021: Continued adjustment?

The warrant market ended on April 8, 2021 with 49 stocks down, 11 stocks unchanged and 29 stocks increasing. Foreign investors turned to be net buyers again with a total net buying of… Read more »

25 occupations foreign investors do not have access to investment

Decree 31/2021 detailing and guiding a number of articles of the Investment Law has just been issued. In which, specifying a list of 25 occupations that foreign investors have not yet had access… Read more »

Market commentary on April 9: Cash flow remains in the market

Securities company Positive Neutral Negative AseanSC X BSC X BVSC  X MBS  X VDSC  X Shake can take place at high price zones (Asean Securities Company – AseanSC) The phenomenon of order congestion… Read more »

Many large-cap codes reversed, VN-Index dropped slightly

9:40 At the opening, VN-Index once increased by more than 4 points but then fell back. After 45 minutes of trading, the index officially reversed to decrease. Banking stocks were quite differentiated when… Read more »

Works on Hanoi-based Ecopark floating trade center to kick off in 2022

Work on a mega trade center on water is expected to begin in early next year in Ecopark, a housing development in the northern province of Hung Yen’s Van Giang district, with an… Read more »

Vietnamese cloud computing market appeals suppliers

The Vietnamese cloud service market is projected to grow from $181 million in 2019 to $427 million by 2025, exhibiting a healthy compound annual growth rate (CAGR) of over 15 per cent during… Read more »

Lack of raw materials threaten wood prices

Vietnamese exporters of wood products have been struggling with rising transport and material costs. Photo: Le Toan As global supply chains were affected by the Suez Canal incident, the supply issues for raw… Read more »

Airlines catch glimpse of light at the end of tunnel

Vietjet’s forced focus on the domestic arena last year has in part paid off financially. Photo: Duc Thanh In total, the Vietnamese aviation sector reported losses of VND18 trillion ($782.6 million) from their… Read more »

Hospitals struggling for autonomy

Bach Mai Hospital decided against introducing new fees after a rebuke from the MoH Taking over 60 minutes to transport her father from the northern province of Thai Binh to Bach Mai Hospital,… Read more »

A new food-brewery manufacturing complex inaugurated in Hau Giang

A food – brewery manufacturing complex with an investment of VND1.6 trillion (US$69.1 million) was inaugurated in the southern province of Hau Giang on March 20.  Masan Consumer’s US$69.1-million food-brewery manufacturing complex is… Read more »

The reason Vietnam has the most billionaires ever

According to the 2021 World Billionaire list just announced by Forbes, Vietnam has 6 businessmen in the group of super-rich people, owning assets of $ 1 billion or more. Vietnamese billionaires include Vingroup… Read more »

SCB implements a plan to offer shares to the public

Saigon Bank (SCB) has just announced the implementation of a plan to offer SCB shares to the public. Accordingly, SCB plans to increase its charter capital by VND 15,000 billion in the period… Read more »

Pegasus inks agreement with Banyan Tree to manage Dhawa Quy Nhon Resort

Aiming to create an international tourist destination with beautiful landscape and architectural design, Dhawa Quy Nhon Vietnam will be managed by highly-acclaimed and deeply experienced Singapore hotel operator – Banyan Tree Hotels &… Read more »

Prime Minister gives green light to Quang Tri airport project

The government has authorized the central province People’s Committee Quang Tri to conduct a pre-feasibility study for the construction of Quang Tri Airport under the public-private partnership (PPP) financing mechanism.  Perspective of the… Read more »

After Pha Lai Thermal Power, another subsidiary of Genco 2 pays a record dividend

Hai Phong Thermal Power wants to deduct nearly 1,213 billion dong to pay 25.25% dividend for 2020 The company has advanced 10% cash dividend in the previous 2 times. 18% and profit down… Read more »

Banking and securities group surged, SSIAM VNFin Lead ETF became the best growth fund in the first quarter

Vietnam’s stock market has just ended the first quarter with quite positive developments despite the significant influence from the Covid-19 translation. Ending the session on March 31, the VN-Index stopped at 1,191.44 points,… Read more »

Improving the investment environment: Need a breakthrough

The difficulty bundle the wisdom Currently, 90% of enterprises nationwide have small and even micro-scale production. Therefore, businesses that want to access commercial loans or budget support are not easy. Le Nguyen Duy… Read more »

Busy days ahead for deal-making

Van Duc Phu – Senior expert Investment Promotion Centre, North Vietnam The upcoming days are expected to be a dynamic of investment promotion along with new unveilings and the presence of some huge… Read more »

Blame game begins as Suez blockage dents trade routes

Blame game begins as Suez blockage dents trade routes The combination of two high-power tugboats and a tide that swelled to its highest point in months with the full moon helped to finally… Read more »

Thoughts return to stronger rail options

Thoughts return to stronger rail options. Source: freepik.com Although the Ever Given container ship was rescued one week after being stranded in the Suez Canal in Egypt, the trading world remains rocked as… Read more »

Suez Canal fiasco adding to prolonged trade difficulties

The blockage at the Suez Canal could have been much worse were it not for a successful dredging operation. Photo: AFP The exports of Tien Dat Wood Technology JSC to Europe are suffering… Read more »

Incident shows need for logistics resilience

What role does the Suez Canal play when it comes to Vietnamese trade? Tran Thanh Hai, deputy director of the Ministry of Industry and Trade’s Agency of Foreign Trade The Suez is the… Read more »

Danang promotes investment in string of big projects

Danang is poised to step into a new development chapter With the goal of becoming one of the major socio-economic centres of the country and Southeast Asia, Danang will focus on finishing key… Read more »

Dulux from AkzoNobel launches innovative paints solutions

The Dulux Weathershield portfolio from AkzoNobel helps enhance the protective performance for houses against harsh weather Dulux Weathershield Colour Protect compliments the Dulux Weathershield portfolio to enhance the protective performance for houses against… Read more »

Handling customer complaints and resolution failures

For more complicated conflicts, arbitration or courts are deemed the next routes to a possible solution, Photo: Shutterstock   Almost a decade ago, the Law on the Protection of Consumers’ Rights took effect.… Read more »

Glass half empty for unhappy consumers?

Major companies can sometimes be at reputational risk if they get into squabbles with consumers over often hard-to-prove allegations, Photo: Shutterstock Saigon Beer Alcohol Beverage Corporation this month is being dragged into Vietnamese… Read more »

SABECO at great pains to ensure protection of consumers’ interests

SABECO is due to hear announcement of the case result this month The representative for SABECO shared with VIR that the company is maintaining its utmost efforts to attempt to solve the issue… Read more »

Forbes publishes the 2021 Rich List: Vietnam has 6 billionaires

Vietnam has 6 billionaires recognized by Forbes, an increase of 2 compared to 2020, and Vingroup Chairman Pham Nhat Vuong is still the richest person in Vietnam. Forbes magazine has just published a… Read more »

Stock on April 7 through technical ‘prism’

Securities company Positive Neutral Negative AseanSC X BVSC X KBSV X PHS X SHS X VCSC X VDSC X VN-Index is in overbought zone, and could reverse at any time (Asean Securities Company… Read more »

QTP: Quang Ninh thermoelectricity and the chance to increase waves after REE divestments

The liquidity of QTP from the beginning of 2021 is very remarkable. This code turned out to be the complete opposite of the previous period which had almost no liquidity. Illustration. Stock is… Read more »

Cash flow was still ‘massively’ entering the market, HoSE continued to block orders from the morning session

15:00 The HoSE continued to have almost no transactions in the afternoon session when the congestion happened in the morning session. At the end of the session, the VN-Index rose 3.91 points (0.32%)… Read more »

Prudential Vietnam reaffirms sustainable growth goals in 2020

Prudential secured sustainable growth and efficient business operation in 2020 In 2020, Prudential achieved a total revenue of VND33.97 trillion ($1.48 billion), of which net revenue from insurance activities reached VND24.71 trillion ($1.1… Read more »

GE highlights gas potential in low-carbon energy production

While renewable energy is the future, gas generation offers powerful short-term gains towards sustainability At its online seminar featuring key leaders from its global energy business, GE has highlighted the combination of renewables… Read more »

PIA Group ready to provide professional and high-quality aerospace engineering services

The certification allows the Aviation Engineering Service Centre (PIA Engineering) of PIA Group to provide aircraft component maintenance services at Nguyen Khe Industrial Zone, Dong Anh, Hanoi. Established in 2013 and headquartered in… Read more »

SK Group to acquire 16.26 per cent stake in VinCommerce

VinMart supermarket chain of Masan has become a favoured destination for shoppers As the leading players in their industry, Masan and SK share the same view on the explosive growth trajectory of Vietnam’s… Read more »

Investment proposal for route linking Ha Giang with Noi Bai-Lao Cai Highway

Once the ODA side is arranged, the road construction can kick off in Ha Giang According to VNA, the Project Management Board No.2 has requested the Ministry of Transport to send an official… Read more »