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DANANG UNVIVERSITY OF ECONOMICS INTERNATIONAL BUSINESS GROUP ASSIGNMENT ANALYZING VIETNAM’S ECONOMY Lecturer: Nguyen Son Tung Class: 47k01.2 Group’s member: Duong Thi Ngoc Tram Le Duy Bao Dang Quynh chi Ha Thuc Hoan Le Duc Minh CONTENTS GDP Unemployment rate Balance of Trade VietNam’s trade balance in 2020 VietNam’s trade balance in 2021 10 Base interest rate 11 In 2020 11 In 2021 13 CPI 14 In 2020 14 In 2021 15 Inflation 16 In 2020 16 In 2021 17 Labor productivity 18 Consumer spending 19 In 2020 19 GDP 2020 is considered a year of great difficulties and challenges for the world economy in general, including Vietnam The world economy is forecasted to have the most severe recession in history, and the growth of major economies will decrease deeply due to the negative impact of the Covid-19 epidemic However, Vietnam's economy still maintains growth with an estimated GDP growth rate of 2.91% (Tổng cục thống kê, 2021) The Covid-19 epidemic has complicated developments, disrupting the ting socialeconomic activities of countries worldwide; the US-China trade conflict continues In Viet Nam, natural disasters and epidemics have a significant impact on the activities of the economy and people's lives; unemployment and underemployment rates are high However, with drastic and effective solutions in realizing the dual goal of "both disease prevention and socio-economic development", Vietnam's economy still achieved positive results with maintaining growth Although GDP growth in 2020 is the lowest in the 20112020 period and suffering the negative impacts of the Covid-19 epidemic, it is a success for our country with the highest growth rate in the group of countries in the world (Tổng cục thống kê, 2021) GDP growth rate for the years 2011-2020 respectively is: 6.24%, 5.25%; 5.42%; 5.98%; 6.68%; 6.21%; 6.81%; 7.08%; 7.02%; 2.91% (Ngọc Hà, 2020) GDP in 2020 increased by 2.91% (in the first quarter, by 3.68%; in the second quarter by 0.39%; in the third quarter by 2.69%; in the fourth quarter by 4.48%) The GSO showed that the results mentioned above are due to the close inspection of the Covid-19 epidemic, the gradual recovery of the skin to new normal conditions, and the EVFTA agreement that took effect on August Accordingly, economic growth in the fourth quarter was 1.86 percentage points higher than in the third quarter (Ngọc Hà, 2020) In the general growth rate of the whole economy, the agriculture, forestry, and fishery sector increased by 2.68%, contributing 13.5% to the growth rate of the total added value of the whole economy; the industry and construction sector increased by 3.98%, contributing 53%; the service sector increased by 2.34%, contributing 33.5% (Tổng cục thống kê, 2020) In the agriculture, forestry, and fishery sector, the output of the number of perennial crops, main farming products, and shrimp production in 2020 increased quite well, so the growth rate of this area reached a higher level than in 2019 Which, agriculture increased by 2.55%, only increasing at a lower rate in 2011, 2012, and 2018 in the period 20112020, contributing 0.29 percentage points to the value-added growth rate of the whole economy; forestry increased by 2.82% but the utilization rate was low, contributing only 0.02 percentage points; aquaculture increased by 3.08%, higher than the growth rate of 2.8% in 2015 and 2016 in the period 2011-2020, contributing 0.1 percentage point (Tổng cục thống kê, 2020) In the industry and construction sector, the industry in 2020 increased by 3.36% compared to the previous year, contributing 1.12 percentage points to the growth rate of the total added value of the whole economy Which, the processing and manufacturing industry played a key role in leading the growth of the economy with an increase of 5.82%, contributing 1.25 percentage points; electricity production and distribution increased by 3.92%, contributing 0.19 percentage points; water supply, waste, and wastewater management, and treatment activities increased by 5.51%, contributing 0.04 percentage points; Mining decreased by 5.62% (due to a decrease in crude oil production by 12.6% and natural gas by 11.5%), reducing 0.36 percentage points in the overall increase The construction industry increased by 6.76%, higher than the growth rate of 2011, 2012, and 2013 in the period 2011-2020, contributing 0.5 percentage points (Tổng cục thống kê, 2020) The Covid-19 epidemic has complicated developments, seriously affecting commercial and service activities The service sector in 2020 achieved the lowest growth rate in the years 2011-2020 Contributions of some market service industries with a large proportion to the growth rate of total added value in 2020 are as follows: Wholesale and retail increased by 5.53% compared to the previous year, contributing 0.61 points percent; financial, banking, and insurance activities increased by 6.87%, contributing 0.46 percentage points; the transportation and warehousing industry decreased by 1.88%, decreasing by 0.06 percentage points; accommodation and catering services decreased by 14.68%, down 0.62 percentage points (Tổng cục thống kê, 2020) Regarding the economic structure in 2020, the agriculture, forestry, and fishery sector account for 14.85%; industry and construction accounted for 33.72%; service sector accounted for 41.63%; product tax minus product subsidies accounts for 9.8% (corresponding structure in 2019 is: 13.96%; 34.49%; 41.64%; 9.91%) (Tổng cục thống kê, 2020) Regarding GDP use in 2020, final consumption increased by 1.06% compared to 2019; accumulated assets increased by 4.12%; exports of goods and services increased by 4.97%; imports of goods and services increased by 3.33%.(Tổng cục thống kê, 2020) Quality of economic growth: labor productivity of the whole economy at current prices in 2020 is estimated at 117.9 million VND/worker (equivalent to 5,081 USD/worker, up 290 USD compared to 2019) ; At constant prices, labor productivity increased by 5.4% due to the improvement of workers' qualifications (the percentage of trained workers with degrees and certificates in 2020 reached 24.1%, higher than the rate of 22.8% in 2019) (Tổng cục thống kê, 2020) Gross domestic product (GDP) in the fourth quarter of 2021 was estimated to increase by 5.22% over the same period last year, although higher than the growth rate of 4.61% in 2020 but lower than the growth rate of the fourth quarter of other years 2011-2019 In which, the agriculture, forestry, and fishery sector increased by 3.16%; industry and construction increased by 5.61%; service sector increased by 5.42% Regarding GDP used in the fourth quarter of 2021, final consumption increased by 3.86% over the same period last year; accumulated assets increased by 3.37%; exports of goods and services increased by 14.28%; imports of goods and services increased by 11.36% (Tổng cục thống kê, 2022) It is estimated that GDP in 2021 will increase by 2.58% (in the first quarter, by 4.72%; in the second quarter by 6.73%; in the third quarter by 6.02%; in the fourth quarter by 5.22%) over the previous year due to the Covid-19 epidemic -19 seriously affected all sectors of the economy, especially in the third quarter of 2021, many key economic localities had to implement prolonged social distancing to prevent epidemics In the general growth rate of the whole economy, the agriculture, forestry, and fishery sector increased by 2.9%, contributing 13.97% to the growth rate of the total added value of the whole economy; the industry and construction sector increased by 4.05%, contributing 63.80%; the service sector increased by 1.22%, contributing 22.23% (Tổng cục thống kê, 2022) In the area of agriculture, forestry, and fishery, the productivity of most crops is quite good compared to the previous year, livestock has grown steadily, and the export turnover of some agricultural products will increase in 2021, contributing to maintaining the growth rate leader of the whole region The agricultural sector increased by 3.18%, contributing 0.29 percentage points to the growth rate of the total added value of the whole economy; the forestry sector increased by 3.88%, contributing 0.02 percentage points; the fisheries sector increased by 1.73%, contributing 0.05 percentage points (Tổng cục thống kê, 2022) In the industry and construction sector, the processing and manufacturing industry continued to be the growth engine of the whole economy with a growth rate of 6.37%, contributing 1.61 percentage points to the growth rate total value added to the whole economy The electricity production and distribution industry increased by 5.24%, contributing 0.19 percentage points The mining industry decreased by 6.21%, down 0.23 percentage points due to the decrease in crude oil production by 5.7% and gaseous natural gas by 19.4% The construction industry increased by 0.63%, contributing 0.05 percentage points (Tổng cục thống kê, 2022) The complicated development of the Covid-19 epidemic since the end of April has seriously affected commercial and service activities The negative growth of some service industries accounted for a large proportion, reducing the overall growth rate of the service sector and the whole economy The wholesale and retail industry decreased by 0.21% over the previous year, reducing 0.02 percentage points in the growth rate of the total added value of the whole economy; the transportation and warehousing industry decreased by 5.02%, decreasing by 0.3 percentage points; the accommodation and food service industry dropped sharply by 20.81%, down 0.51 percentage points The health sector and social assistance activities achieved the highest growth rate in the service sector with an increase of 42.75%, contributing 0.55 percentage points; financial, banking, and insurance activities increased by 9.42%, contributing 0.52 percentage points; information and communication industry increased by 5.97%, contributing 0.36 percentage points (Tổng cục thống kê, 2022) Regarding the economic structure in 2021, the agriculture, forestry, and fishery sector account for 12.36%; industry and construction accounted for 37.86%; service sector accounted for 40.95%; product tax minus product subsidies accounted for 8.83% (Tổng cục thống kê, 2022) Regarding GDP use in 2021, final consumption increased by 2.09% compared to 2020; accumulated assets increased by 3.96%; exports of goods and services increased by 14.01%; imports of goods and services increased by 16.16% (Tổng cục thống kê, 2022) Unemployment rate “The number of unemployed people of working age in 2021 was more than 1.4 million, an increase of 203,700 people compared to the previous year The unemployment rate of people of the working-age was 3.22%, an increase of 0.54 percentage points compared to 2020.” (VietNam Global, 2022) Quarter I: The outbreak of Covid 19 for the third time just before and during the Lunar New Year has increased significantly the number of unemployed workers The number of unemployed people of working age in the first quarter of 2021 is 1095,4 thousand people and the unemployment rate of laborers the age in the first quarter of 2021 is 2.42% Quarter II: The number of unemployed people of working age in the second quarter of 2021 was nearly 1.2 million, an increase of 87.1 thousand people compared to the previous quarter and a decrease of 82.1 thousand people compared to the same period last year The unemployment rate of working age in the second quarter of 2021 was 2.62%(up to 0.2%) compared to the previous one and decreased by 0.23% percentage points over the same period last year Quater III: In the third quarter, the complicated growth of the fourth Covid-19 pandemic in many parts of the country, especially in key economic provinces and cities, has made the labor situation worse The number of people with jobs decreased sharply compared to the previous quarter, and the unemployment rate reached a peak The number of unemployed people working a people the third quarter of 2021 was more than 1.7 million people, an increase of 532.2 thousand people compared to the previous quarter and an increase of 449.6 thousand people compared to the same period last year The unemployment rate of working age in the third quarter of 2021 was 3.98%(up to 1.36%) compared to the previous one and increased by 1,25% percentage points over the same period last year Quarter IV: The number of unemployed people of working age in the fourth quarter of 2021 was more than 1.6 million people, a decline of 113.1 thousand people compared to the previoquarterter and an increase of 369.2 thousand people compared to the same period last year The unemployment rate of working age in the third quarter of 2021 was 3.56%(down to 0.42%) compared to the previous one and increased by 0.93% percentage points over the same period last year With the policy of flexible adaptation in epidemic prevention to restore the economy, the lả market in the fourth quarter began to recover Labor force, the number of employed people in the fourth quarter increased compared to the previous quarter while the unemployment rate decreased However, in general, for the whole year of 2021, the complicated and prolonged impact of Covid 19, the pandemic has taken a role on the employment in 2021 more than in 2020 Balance of Trade VietNam’s trade balance in 2020 The trade balance is the value of exported goods less the value of imported goods A positive value represents a trade surplus, whereas a negative value represents a trade deficit In 2020, Vietnam's trade surplus is expected to be around 19.97 billion US dollars (2022, Aaron O'Neill) Despite facing numerous difficulties and challenges as a result of the Covid-19 epidemic, Vietnam set a new record in terms of export-import turnover in 2020 The total importexport value of the country as a whole reached 545.36 billion USD, up 5.4 percent from 2019 In which case, the value of exported goods increased by 7.0 percent to 282.65 billion USD increased by 18.39 billion USD, while imports reached 262.70 billion USD, up 3.7 percent, respectively by 9.31 billion USD The country's merchandise trade balance reached a surplus of 19.95 billion USD at the end of 2020, the highest level in consecutive trade surpluses since 2016 (Trần Duẩn, 2022) Impressive import-export turnover has propelled Vietnam to the 22nd position in the world in terms of turnover and export capacity, and the 26th position in terms of international trade, marking a watershed moment for the industry Shortly, exports will outnumber imports Vietnam, in particular, has many export products ranked fifth in the world, including rice, cashew nuts, coffee, textiles, footwear, and seafood (Trần Duẩn, 2022) The export goods structure continued to improve, with the crude export content decreasing and the export of processed and industrial products increasing The proportion of processed industrial products in total export turnover increased from 78.9 percent in 2015 to around 85 percent today (in 2020) Meanwhile, the proportion of fuel and mineral products has fallen from 3% in 2015 to less than 2% (in 2020) In difficult times, Vietnam has 31 export items worth more than USD billion, with products worth more than $5 billion and worth more than $10 billion (Trần Duẩn, 2022) The fact that the Vietnamese government has signed new free trade agreements (FTAs) such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EU-Vietnam Free Trade Agreement, and the Economic Partnership Agreement Comprehensive Regional has created favorable conditions for Viet Nam In 2020, Vietnam had a trade surplus primarily with developed-country markets with strict quality requirements for imported goods, such as the United States (nearly 62.7 billion USD), the EU (nearly 20.3 billion USD), and the EU (nearly 20.3 billion USD) (nearly 20.3 billion USD) Meanwhile, imports from the United States totaled 13.7 billion USD, a 4.9 percent decrease from the same period in 2019 Vietnam's exports and imports of goods to the Asian market continued to be significant The highest is approximately 64.5 percent of the total export-import value Vietnam's import-export turnover to China, ASEAN, Japan, and South Korea, respectively, is USD 132.4 billion, USD 53.1 billion, USD 39.7 billion, and USD 65 billion (Trần Duẩn, 2022) VietNam’s trade balance in 2021 The results achieved in the second half of December 2021 brought the total import-export value of the whole country in 2021 to USD 668.55 billion, up 22.6% (equivalent to an increase of USD 123.23 billion) over the previous year 2020 (Hoàng Lan, 2022) In which, the total import-export value of foreign direct investment (FDI) enterprises reached US$463.43 billion, up 24.6% (equivalent to $91.55 billion); the import-export value of domestic enterprises was 205.12 billion USD, up 18.3% (equivalent to 31.67 billion USD) over the previous year (Hoàng Lan, 2022) In the 2nd period of December 2021, the trade balance of goods had a surplus of USD 2.6 billion In general, in 2021, the trade balance will have a surplus of 4.08 billion USD (Hoàng Lan, 2022) Specifically, in terms of exports: The total value of Vietnam's export goods in the 2nd period of December 2021 reached 18.68 billion USD, up 18.4% (equivalent to a 2.9 billion USD increase in absolute number) compared to December 1, 2021 (Hoàng Lan, 2022) The export value of the 2nd period of December 2021; fluctuated and increased compared to the period of November 1, 2021, in the following commodity groups: Machinery, equipment, tools, and spare parts increased by 532 million USD, equivalent to 28.5; phones and components increased by 497 million USD, corresponding to an increase of 19.4%; textiles and garments increased by 439 million USD, emulating an increase of 27.8%; computers, electronic products, and components increased by 286 million USD, representing an 11.4% increase (Hoàng Lan, 2022) Thus, in general, in 2021, the total export value of Vietnam will reach 336.31 billion USD, an increase of 19%, equivalent to an increase of 53.68 billion USD compared to 2020 (Hoàng Lan, 2022) Statistics of the General Department of Customs also show that the export value of goods of foreign direct investment (FDI) enterprises in the 2nd period of December-2021 reached 12.92 billion USD, up 11 3%, equivalent to an increase of 1.31 billion USD compared to the first period of the month Thereby bringing the total export value of goods from the beginning of the year to the end of December 2021 of this group of enterprises to the US $245.22 billion, an increase of 20.9% (equivalent to an increase of US$42.36 billion) over the previous year before, accounting for 72.9% of the total export value of the country (Hoàng Lan, 2022) Regarding imports: Import value of goods in the 2nd period of December 2021 increased compared to the previous period mainly in the following commodity groups: Coal of all kinds increased by 160 million USD, corresponding to a strong increase of 85.4%; animal feed and raw materials increased by 97 million USD, equivalent to 57.9%; machinery, equipment, tools and spare parts increased by 92 million USD, corresponding to an increase of 4.7% (Hoàng Lan, 2022) Thus, in 2021, the total import value of the whole country reached 332.23 billion USD, up 26.5% (equivalent to 69.54 billion USD) compared to 2020 (Hoàng Lan, 2022) Import value of goods by FDI enterprises in this period reached 10.36 billion USD, down 4.6% (equivalent to 496 million USD) compared to the first period of December 2021 In 2021, the total import value of this group of enterprises reached 218.20 billion USD, up 29.1% (equivalent to 49.2 billion USD) over the same period last year, accounting for 65.7% total import value of the country (Hoàng Lan, 2022) Base interest rate In 2020 The overall balance of payments surplus and the risk of being included in the list of currency manipulators by the US will help the VND not depreciate sharply in 2020 Vietnam has had an overall balance of payments surplus since 2016 which is a different feature compared to 2015 and 2007-2011 (the period when the VND depreciated strongly) The surplus comes from both the current account and the capital balance It is forecast that the overall balance of payments will continue to have a high surplus in 2020, mainly thanks to a trade surplus, FDI inflows, and stable remittances (Đặng Nhật Minh, 2019) Pressure on the exchange rate in 2020 will come from the further weakening of the yuan (which is forecast to depreciate by 3-4% if the US-China trade war escalates) and the US currency and China Emerging Markets other reasons make the competitiveness of Vietnam's exports decrease However, the risk of Vietnam being included in the list of "currency manipulators" by the US is a big risk, forcing the State Bank to be cautious in the strong devaluation of the VND It is forecasted that the VND will depreciate at most 2% in 2020 (Đặng Nhật Minh, 2019) The interest rate level in 2020 will not increase further, it may decrease slightly if the State Bank continues to cut the operating interest rate In addition, the deposit interest rate level increased (about 20 points, mainly in the group of small and medium commercial banks) in the first 10 months of 2019 before dropping sharply in November due to the decision to adjust the deposit interest rate ceiling motion of the State Bank (Đặng Nhật Minh, 2019) The big challenge for the management of monetary policy in 2020 comes from the upward trend of inflation Although the CPI may not increase to too high a risk, it is still an obstacle that makes it difficult for the State Bank to further cut operating interest rates such as ceiling deposit rates, OMO rates, and bill rates …, Especially in the first half of 2020 (Đặng Nhật Minh, 2019) On that basis, BVSC forecasts that the interest rate level in 2020 will likely be stable, not increase beyond the end of 2019 In the scenario where inflation gradually cools down in the second half of 2020, the State Bank is likely to consider cutting its visit operating interest rates if GDP growth slows down significantly (Đặng Nhật Minh, 2019) The deposit interest rate level will generally remain at the current level, difficult to reduce deeply at banks that have not met the requirements for capital adequacy ratio (starting from 2020, Basel II is approved by the State Bank of Vietnam) approve) acceptance) (Applicable to the whole system and currently only about 18/38 banks have met this standard) as well as a roadmap to gradually reduce the ratio of short-term capital for medium and long-term loans from the current 40% to 30% from the issuance date October 1, 2022 (Đặng Nhật Minh, 2019) In 2021 Ha Noi – Analysts predict that commercial bank deposit interest rates will continue to fall and remain low in the coming months According to a report by Bao Viet Securities Company (BVSC)’s analysts said the average deposit interest rate continued to inch down last month for both 6-month and 12month terms As a result, the average rates for 6-month and 12-month deposits fell by 0.01 and 0.06 percentage points in October, to 4.70 and 5.70 percent, respectively, compared to the previous month In comparison to the same period last year, average 6-month and 12-month deposit interest rates fell by about 0.5 percentage points According to BVSC analysts, Vietnam's consumer price index increased by only 1.81 percent in the first ten months of 2021, the lowest rate since 2016 They predict that the index will rise by only 2.5-3 percent for the entire year of 2021 "The low inflation rate would create favorable conditions for the State Bank of Vietnam (SBV) to maintain a loose monetary policy to stimulate the economy for recovery in the final months of the year." Deposit interest rates will thus remain low in the coming months," they predicted Deposit growth at banks is slowing in a context where deposit interest rates have reached historic lows According to the SBV, by the end of August, bank deposits had increased by only 4.17 percent year on year to more than VN10.4 quadrillion, the slowest growth rate since 2012 Currently, four state-owned banks (Vietcombank, VietinBank, Agribank, and BIDV), as well as some large banks (Techcombank and Military Bank) have the lowest interest rates in the banking system The highest savings interest rate for 12-month deposits is 5.5 percent per year at Vietcombank, Agribank, and BIDV, with VietinBank capping the rate at 5.6 percent per year Previously, banks frequently raced to raise savings interest rates and launch promotional programs to attract depositors in the final months of the year to meet rising capital demands in the peak business season ahead of the country's most important holiday Tet (Lunar New Year) However, as a result of the negative effects of the COVID-19 pandemic, savings interest rates have been falling and have remained stable since last year Despite significant reductions in lending interest rates by banks this year, credit increased 7.42 percent in the first nine months of the year, according to the SBV Credit expansion is expected to reach 12% by the end of the year-VNS (Trinh Thanh Thuy, 2021) CPI In 2020 According to the General Statistics Office, the consumer price index (CPI) witnessed a continued decline in the following months, especially the consumer price index (CPI) in April 2020 decreased by 1.54% compared to the previous month, which was the lowest level in the 2016-2020 period In specific, the prices of six out of eleven groups of commodities decreased as compared to the previous month The price index of the group of traffic registered the highest decrease of 13.86% due to the influence of two downward adjustments in gasoline and oil prices on March 29, 2020, and April 13, 20200, causing the gasoline and oil price index to decrease by 28,48% as well as due to the spread of the Covid-19 pandemic, many promotional programs to stimulate consumer demand were launched by airlines to reduce inventories, reducing the prices of many traffic items, and the fares of some vehicles Traffic also decrease due to limited travel demand (the price of passenger cars decreased by 0,2taxiaxt fare decreased by 0,74% The group of housing and construction materials reduced by 2.3becausehat many households reduced their housing rents to support consumers during the epidemic situation, housing rents decreased by 0.97%; the price of housing maintenance materials decreased by 0.27%; gas prices decreased by 19.74%, and kerosene price decreased by 29.97% Other groups of culture, entertainment, and tourism decreased by 0.4%; the group of footwear and hat decreased by 0.17%; the group of postal services & telecommunication was down by 0.02%, and the group of other commodities and services went down by 0.13% The prices of the remaining four groups increased as compared to the previous month, of which the group of food and catering services, the group of household appliances and goods, the group of medicine and healthcare but not significantly while the prices for the group of education remained unchanged Factors restraining CPI in 2020: - The sharp decrease in domestic gasoline and gas prices in line with world prices was the main factor that reduced pressure on the price level in the months from February to May 2020 – Tourism demand decreased during the period of social distancing according to Directive No 16/CTTTGg of the Prime Minister, so the average price of a package tour in 2020 was down 6.24% over the previous year – Due to the impact of the Covid-19 epidemic, people's travel demand decreased, airfares decreased by 34.7%; train fares decreased by 2.12% – The Government deployed support packages for people and producers facing difficulties due to the Covid-19 epidemic Specifically, the support package of the Electricity of Vietnam (EVN) deploys to reduce electricity prices and electricity bills for customers people In 2021 The average consumer price index in 2021 increased by 1.84% compared to 2020, the lowest average annual increase since 2016 However, there was a slight increase between months related to Vietnam Consumer Price Index in 2021 In which, the highest increase almost belongs to the group of transport: 2.29%,1.55%, 2.29%,0.87% coresponding to January, February, March, and April The main reason why this group continuously increased was the growth of oil and gasoline prices and the Government adjusted 20 times in 2021 There was a small decrease in March, April, August, and September due to the food & catering service group Reasons for the decrease in 2021: – Prices of food products in 2021 will decrease by 0.54% compared to 2020, causing CPI to decrease by 0.12 percentage points, of which pork price will decrease by 10.52%; the price of chicken decreased by 0.28% (Tổng cục thống kê, 2021) – The Government has implemented support packages for people and producers facing difficulties due to the Covid-19 epidemic such as the support package of the Electricity of Vietnam (Tổng cục thống kê, 2021) – The impact of the Covid-19 epidemic caused people to limit their travel, whereby the price of airfares in 2021 decreased by 21.15% compared to the previous year; package tour prices decreased by 2.32% (Tổng cục thống kê, 2021) Inflation In 2020 At the end of 2020, the inflation rate for Viet Nam was 3.2 % (Knoema, 2020), successfully controlling inflation in 2020, reaching the target below 4% set by the national assembly (Office, 2020) + January: The annual inflation rate in Vietnam increased to 6.43 (Trading Economy, n.d.)percent in January 2020 from 5.23 percent in the prior month (12/2019) (Trading Economy, n.d.) It was the highest inflation rate since August 2013, pushed up by the prices of food & catering services, amid higher demand for foodstuff and drinks for the Lunar New Year festival and continued effects of swine fever Inflation also quickened for housing & construction materials (6.29 percent vs 5.12 percent), as domestic gas costs increased on January 1st; and transport (7.50 percent vs 3.52 percent), due to the effect of the gasoline price adjustment on December 31, 2019 (Trading Economy, n.d.) + February-May: The inflation rate decreased continuously for months from 5,4% (February) to 2,4%(May) (Trading Economy, n.d.) The main reasons come from two sides The outbreak of Covid-19 caused demand-side shocks, requiring the implementation of urgent measures to prevent and control the COVID-19 outbreak from the Government And the annual inflation rate in Vietnam declined to 2.40 percent in May of 2020 the lowest inflation rate since October of last year, due to the initiative in controlling petrol prices by the government amid a loosening of coronavirus-related lockdown measures To be specific, Transport prices fell more (-23.37 percent vs -19.57 percent in April), due to the decrease in the petrol and oil prices (Trading Economy, n.d.) + June-July: The inflation rate suddenly increased by (Ánh, 2021)3,17% and 3,39% (Trading Economy, n.d.)respectively, mainly due to the decrease in petrol prices after the decline since Tet and the increase in pork on the first day of June + August-December: The inflation rate continuously declined until the end of the year and bottomed at 1,29%-the least since January 2016 Mainly because of the drop in transport prices (-11,68% vs - 14,07%) between December and July caused by the decrease in gasoline and oil prices as well as electricity and water prices (Trading Economy, n.d.) In general, the inflation rate in transport fluctuated while the inflation in food&catering services experienced the growth due to the effect on the covid-19 except February lower demand for foodstuff and drinks after the Lunar New Year festival) In 2021 Compared to 2020, Vietnam’s inflation rate in 2021 fluctuated frequently However, in the context of increasing global inflation pressure, while the global inflation rate is estimated at 3,8%-the highest in 10 years, Vietnam’s inflation rate is reached 1,84%- the lowest since 2015 (Hoàng Nữ Ngọc Thủy, 2022), regarded as a “backwind” in the world inflation trend The inflation rate mildly increased in April, May, July, and August mainly due to the growth of raw materials, input materials for production, and transportation costs while consumption and private investment accelerated Reasons for stable inflation: + Food prices fell because of the abundant domestic supply, especially pork prices saw deeply decline of about 30% (Hoàng Nữ Ngọc Thủy, 2022) + Week domestic demand due to the effect of isolation + Supportive prices effect managed by the State, including electricity price (down 0.9%), price of medical services(still unchanged), and price of education services (mildly increased by 1,9%) (Hoàng Nữ Ngọc Thủy, 2022) + The state’s ability to control prices Labor productivity Regarding the quality of economic growth, the labor productivity of the whole economy at current prices in 2020 is estimated at 117.9 million VND/worker (equivalent to 5,081 USD/worker, up 290 USD compared to 2019) [11]); At constant prices, labor productivity increased by 5.4% due to the improvement of workers' qualifications Investment efficiency index (ICOR coefficient) decreased from 6.42 in 2016 to 6.11 in 2017; 5.98 in 2018 and 6.08 in 2019 On average, in the period 2016-2019, the ICOR coefficient reached 6.13, lower than the coefficient 6.25 in the 2011-2015 period Particularly in 2020, due to the negative impact of the Covid-19 epidemic, production and business activities of the economy were delayed, completed and put into use construction projects had not yet brought into full play their capacity, so ICOR in 2020 reached 14.28; In the period 2016-2020, the average ICOR coefficient is 7.04 (Tổng cục thống kê, 2020) Labor productivity of the whole economy at current prices in 2021 is estimated at 171.3 million VND/worker (equivalent to 7,398 USD/worker, an increase of 538 USD compared to 2020) At constant prices, labor productivity in 2021 will increase by 4.71% due to improved qualifications of workers (the proportion of trained workers with degrees and certificates in 2021 will reach 26.1%, higher than the 25.3% of 2020) (Tổng cục thống kê, 2022) Consumer spending Under the shadow of Covid-19 and the isolation, the consumer’s spending habits in 2020 and 2021 completely changed Affected by the long-term social distancing, out-of-home entertainment like holidays & vacations, oil and gasoline costs, and fashion are significantly reduced (Cimigo, 2021) Meanwhile, indoor activities such as books, stationery, gaming, and sports apparel account for more of the consumer spending Delivery and ride-sharing have been accelerated not just by working from home but also by the propensity to avoid contact with stores and food and beverage outlets Both online gaming and content streaming through the likes of YouTube, TikTok, and Qty have accelerated as consumers have spent less time out of home and more time on their smartphones E-wallets and spending on online education platforms also witnessed an increase According to table 1, spending on out-of-home entertainment, holidays/vacations, and new clothes, consider “nice-to-have” experienced a downward trend while medical insurance premiums overcame out-of-home entertainment and jumped into fifth place for ways in which consumers spend their cash (Trương Thanh Quế Minh, 2020) Despite a slight decrease, Vietnam was still the country with the highest proportion of people saying that their spare money goes on medical insurance premiums globally with 38% (Trương Thanh Quế Minh, 2020) Remarkably, during the pandemic, online shopping and e-commerce platforms become trends in consumer spending, leading to a huge change in the structure of consumer spending Changes due to the pandemic have prompted consumers to reassess their current spending habits and long-tẻm financial plans More than 53% of Vietnamese consumers cut non-essential items over six months in 2021 while 80% plan to continue cutting in the future (Hà, 2021) Therefore, e-commerce shopping carts tend to shift significantly to essential items such as food&catering, health services (social insurance, medical equipment for epidemic prevention) ... development", Vietnam''s economy still achieved positive results with maintaining growth Although GDP growth in 2020 is the lowest in the 201 12020 period and suffering the negative impacts of the Covid-19... than the growth rate of 2.8% in 2015 and 2016 in the period 2011 -2020, contributing 0.1 percentage point (Tổng cục thống kê, 2020) In the industry and construction sector, the industry in 2020 increased... Hà, 2020) GDP in 2020 increased by 2.91% (in the first quarter, by 3.68%; in the second quarter by 0.39%; in the third quarter by 2.69%; in the fourth quarter by 4.48%) The GSO showed that the
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