Top 10 economic events of Viet Nam in 2020
Top 10 economic events of Viet Nam in 2020
Việt Nam being among the few countries to post GDP growth and the signing of the Regional Comprehensive Economic Partnership (RCEP) agreement in 2020 are among the top 10 domestic economic events in the year.
The following are the 10 outstanding events as selected by the Vietnam News Agency.
1. GDP growth amidst a severe global economic downturn
Amid the severe global economic downturn caused by the COVID-19 pandemic, Viet Nam was among very few countries to post positive GDP growth, estimated at 2.5-3 per cent. This is attributable to the flexible management of the Government and the determination of the entire political system to complete the dual goals of containing the pandemic and maintaining economic growth. The result creates a crucial foundation for the country to fulfil socio-economic targets during 2021-25.
2. Viet Nam a founding member of the world’s largest free trade agreement
The RCEP agreement was signed on November 15, within the framework of the 37th ASEAN Summit organised by Viet Nam as ASEAN Chair. The signatories comprise 10 ASEAN member countries and five partners – China, Japan, the Republic of Korea, Australia and New Zealand. The pact is expected to create the world’s largest free trade agreement area with combined GDP of US$26.2 trillion or about 30 per cent of the global GDP and nearly 28 per cent of the global trade. Apart from RCEP, the EU-Viet Nam Free Trade Agreement (EVFTA) came into force on August 1, which has opened up many opportunities for Viet Nam.
3. Huge losses caused by natural disasters
The year 2020 witnessed unusual and extreme weather patterns, notably the historic flooding in the central region. Storms ravaged the region one after another in October and November, with the ninth – Molave - the most destructive storm over the past two decades.
Torrential rains triggered massive landslides at the Rao Trang 2 Hydropower Plant in central Thua Thien-Hue Province, Nam Tra My and Phuoc Son districts in central Quang Nam Province, and Huong Hoa District in central Quang Tri Province, which claimed many lives. In addition, riverbank and coastal slides in the Mekong Delta region, and earthquakes in Muong Te and Moc Chau in the northern mountainous provinces of Lai Chau and Son La caused great human and property losses. The total damage caused by natural disasters in the year was estimated at VND38.4 trillion (US$1.66 billion), with up to VND31.7 trillion by floods and storms.
4. Programme on national digital transformation approved
Prime Minister Nguyen Xuan Phuc on June 3 approved the national programme on digital transformation until 2025, with a vision toward 2030. This is the first time the Government has issued a decision on national digital transformation, with the aim of developing a digital Government, economy and society and establishing Vietnamese digital technology enterprises that can go global. Under the programme, the digital economy is expected to make up 20 per cent of the country’s GDP and Viet Nam is expected to enter the world’s top 50 countries in the Global Competitiveness Index (GCI) by 2025. By 2030, the digital economy will make up 30 per cent of the country’s GDP and Viet Nam will be in the world’s top 30 countries in the Global Competitiveness Index.
5. Trade surplus soars despite COVID-19
Although the COVID-19 pandemic has severely disrupted the global supply chain, Viet Nam’s exports stayed high, with the trade surplus hitting $19 billion. In 2020, 31 groups of commodities joined the more than $1 billion club in export revenue, making up 92 per cent of the total export value. Of them, six posted export revenue of more than $10 billion.
6. Public investment disbursement grows strongest in a decade
Public investment disbursement has been stepped up in the year and is projected to exceed 90 per cent of the set target, the highest in the 2011-20 period. Since the beginning of this year, the Government has regarded public investment as a major resource to spur national economic growth.
7. Central bank cuts cut policy rates for three times
This was the first year the State Bank of Viet Nam slashed policy rates three times, by 1.5-2 per cent per annum. The adjustment has supported liquidity for credit institutions, lowering borrowing costs for people and businesses.
8. Number of dissolving firms surge
The COVID-19 pandemic ravaged the business community and a total of 93,500 enterprises ceased operations, waited for dissolution procedures or completed dissolution procedures during January-November, a year-on-year increase of 15.6 per cent. Most of the companies operated in catering, real estate, brokerage service and logistics. The increase in dissolving businesses makes the Government’s target to have at least 1 million enterprises this year unfeasible.
9. Stock market marks 20th birthday
After 20 years of operation, the Vietnamese stock market has developed in both scale and quality, and become an important channel to mobilise mid and long-term capital, making a significant contribution to the economy. As of November 30, the country’s stock market capitalisation had exceeded VND6.11 quadrillion ($264.24 billion) - the highest level ever, accounting for 101.33 per cent of the GDP and surpassing the target of 70 per cent set in the stock market development strategy by 2020.
10. Aviation, tourism suffer heavy losses
2020 was a tough year for the aviation and tourism sectors due to the COVID-19 pandemic. The outbreak drove national flag carrier Vietnam Airlines to lose more than VND15 trillion ($649.6 million), while Vietjet Air, Bamboo Airways and Pacific Airlines reported tens of trillions of Vietnamese dong in losses. The coronavirus also wreaked havoc on the tourism sector, with the number of foreign visitors dropping 80 per cent and that of domestic travellers slipping nearly 50 per cent. Total losses were estimated at VND530 trillion.
