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Focus on investment, export and consumption for economic growth

WP – That is the message of the Prime Minister Nguyen Xuan Phuc at the Government's online conference with localities to evaluate the socio-economic situation in the first 6 months of 2020 and deploy the tasks of the last 6 months on 2nd & 3rd of July


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Prime Minister and Deputy Prime Ministers attended the meeting - VGP

 Attending the conference at Dong Nai were the Party Central Committee Member, Secretary of the Provincial Party Committee, Chairman of the Provincial People's Council Nguyen Phu Cuong; Deputy Secretary of the Provincial Party Committee, Chairman of the Provincial People's Committee Cao Tien Dung, together with representatives of departments, branches and localities of the province.

Opening speech of the Prime Minister said that Vietnam's growth engine is like a "three-horse carriage", consisting of three most important components, which are investment, export and consumption. According to the Prime Minister, early prevention of epidemics creates an important premise for socio-economic development. The world highly appreciates the results of our nation's disease prevention. This was a great success for the entire Party, army and people.

The Prime Minister also stated that the world economic situation continued to deteriorate rapidly due to COVID-19 pandemic complicated developments in global situation, especially the major and important partners of our country. In recent days, the epidemic has spread and it is unable to forecast the end time. The OECD provides two scenarios: If a second pandemic occurs, global growth will decrease by nearly 8%, and if the second outbreak is avoided, then it will decrease by about 6%.

The World Bank forecasts global growth might fall to 5.2%, the sharpest decline since the Great Depression of 1929-1933, while the Great Financial Crisis of 2007-2008 only fell by 1.73%. In the updated report on June 24, 2020, the International Monetary Fund (IMF) forecasts that global growth will decline sharply (4.9%).

Domestically, the influence of COVID-19 on Vietnam was more evident in the second quarter, growing only 0.36%, the lowest level in 30 years. For 6 months, the growth has reached 1.81%. Consumption decreased, exports decreased, the number of international visitors decreased to 99.3% in particular. The number of enterprises suspending business or dissolution increased by 10.8%.

However, overall, according to the Prime Minister, our country has some important bright spots, which are the stability of our macroeconomics maintenance, the guarantee of large balances, creating an important foundation for economic recovery and development. Trade surplus is 4 billion USD. Investment capital of the whole society increases, budget revenue reached a fair level. Stable exchange rates. Interest rate ground continued to decrease. Agriculture is still the foundation of the economy. The index of industrial production continues to recover, in May increased by 11.9% compared to April and in June increased by 10.3% compared to May. Especially, the survey results of processing and manufacturing industrial business trends shows that the majority of businesses forecast business situation in the third quarter will be more stable and better. The number of newly registered enterprises in June increased by 27.9%.

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Provincial leaders and departments attended the meeting in Dong Nai province

General calculation in 6 months, there were 25,200 enterprises continue their operation, increased 16.4%. People's life was guaranteed, the number of poverty households decreased by 74.6% compared to the same period.

Vietnam successfully organized the 36th ASEAN Summit, once again stating the sovereignty and the United Nations Convention on the Law of the Sea in 1982. During the last National Assembly session, the European – Vietnam Free Trade Agreement (EVFTA) and the European – Vietnam Investment Protection Agreement (EVIPA) between Vietnam and the European Union (EU) have been approved, opening a new trade and investment space between 27 EU countries and Vietnam, starting to take effect from 1st  of August  this year. Over the past 6 months, Party and State leaders have held telegraph conversations with 18 heads of state and heads of governments from many countries.

Nikkei newspaper said that Vietnam's PMI in June increased sharply, reaching 51.1 points compared to 42.7 points in May and a record low of 32.7 points in April, showing that production has recovered, new orders increased quickly and strongly. Vietnam ranks first in economic recovery among ASEAN countries.

"Despite the low growth, but in such an international context, we need to be calm, proactive and firm in our judgment and assessment of the situation, not subjective but absolutely not pessimistic," the Prime Minister emphasized. For our country, each time we encounter difficulties, it is also the moment for our Vietnamese bravery, intelligence and the solidarity, unity and consensus of our people to shine. At that time, the "fire test of gold, hardship", the more difficult, the more effort and determination to overcome difficulties. 

Recognizing the tough situation, the Prime Minister posed a question, in which context we have to do to enter a new normal state, requiring us to have special mechanisms, policies and solutions.

Recalling the "dual goal", not letting the disease return, of which shall erase the results that we have strived for, not for the economy, but for the ease of epidemic affecting people's lives, health and development social economy, ensuring growth.

According to the Ministry of Planning and Investment, the GDP growth in the second quarter increased by 0.36%, the first 6 months increased by 1.8%. This is the lowest increase of Vietnam in 10 years but still in the top of the world.

The Minister of Planning and Investment Nguyen Chi Dung said that the World Bank still appreciated and predicted that Vietnam would grow by 2.8% this year. Judging that the last 6 months of the year will be very strenuous, the Minister of Planning and Investment proposed the establishment of a National Steering Committee to combat the economic recession after the Covid-19 pandemic.

Minister of Labor, War Invalids and Social Affairs Dao Ngoc Dung said that the labor market in the second quarter was complicated with an unemployment rate of over 2.5%. However, this figure may increase sharply in the third quarter due to the lack of materials and backlog goods, leading to large-scale job losses. Regarding supporting people affected by the Covid-19 epidemic, Minister Dao Ngoc Dung stated that nearly 16 million people were supported with a total budget of VND 17,500 billion.

At the meeting, the localities expressed their determination to implement the Government's "dual goal" is preventing Covid-19 along with developing socio-economic. The localities have proposed many development solutions such as: dialogue, removing difficulties for enterprises, stabilizing production; participating in incentives programs; continue to support people and businesses in difficulties due to Covid-19; petition the Government to allocate capital for infrastructure projects ...

Concluding the conference, Prime Minister Nguyen Xuan Phuc highly appreciated the efforts of the ministries, branches and localities in preventing and fighting Covid-19, maintaining production and restoring the economy over the past time. In the upcoming time, the whole country needs to continue the spirit of "both defending Covid-19 and be aggressive on the economic front". In which, levels and branches are not neglected in the prevention of epidemics. Related to economic development, the priority solution is to remove difficulties, support production and business activities of enterprises. Ministries and branches need to implement policies to stimulate demand to boost domestic consumption. Fiscal policies must be flexible, proactive and stabilize inflation at less than 4%.

The Prime Minister noted that ministries and agencies should focus on social security policies, ensuring people's lives. For localities, the disbursement of public investment capital should be focused, especially to remove bottlenecks in site clearance. Ministries and localities must take advantage of EVFTA and CPTPP agreements to exploit potential markets and solve difficulties for import and export.

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