Macroeconomics Assignments Vietnam's Macroeconomic Situation And Solutions In Covid-19.Pdf

VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL

4 Nguyễn Lê Huyền Diệu — 19071326

5, Cao Quỳnh Hương -19071170 6 Pham Mai Chi — 20070121

Hanoi, January 2022

I EXECUTIVE SUMMARY

Up to 85,7% of businesses is affected by the Covid-19 epidemic as of April 20, 2020 126,565 businesses responded to a survey by the General Statistics Office Aviation is 100 percent affected, as are accommodation services (97.1%) and food services (95.5%)

In the 9 months of 2021, the Covid-19 epidemic negatively affected the Vietnamese economy GDP within the third quarter of 2021 decreased by 6.17% compared to the identical period last year However, in 9 months normally, GDP growth still reached 1.42%

Il INTRODUCTION

Structure and scope of the report: Macroeconomics in Vietnam

There are five main parts to this report, including executive summary, introduction, main body, conclusion, and reference The scope of this report is the macroeconomics of Vietnam during the covid-19 pandemic

Research problem definition and framework, including the benefits of conducting research The Covid 19 pandemic occurred during 2020 and 2021, the worldwide economy experienced an extreme downturn This report will explain the outline of Vietnam's macroeconomics in the years 2020 and 2022, particularly the effect of the Covid-19 pandemic on the Vietnamese economy, and propose macroeconomic approaches to take care of these issues by industry So, it assists perusers with seeing how Vietnam's economy has been impacted during the Covid-19 pandemic, the benefits, troubles, and difficulties of large scale will be generally talked about here Selected macroeconomics issue description

GDP & Economic growth are the two main issues discussed in this report.

PART 1: OVERVIEW OF VIETNAM’S MACROECONOMIC SITUATION IN 2020-2021

development index increased 39 points from 2016, placing it 49th out of 166 countries Vietnam is the only country in the Southeast to acknowledge the United Nations' action goals

¢ The high trade surplus in goods:

Within the background of a worldwide trade decrease, Vietnam's economic development was fueled by a trade surplus that hit a new high of about 17 billion dollars The rate of inflation was kept below 4% Both industrial production and retail sales increased by a factor of two

« The recovery of the processing and manufacturing industry:

Important sectors of the economy, such as the processing and manufacturing industries, which drive economic growth, and transforming services, grew by 8.3% and 6.1 percent, respectively, over the previous year To be certain that the economy has overcome the most difficult phase and is growing after translation, these indicators must continue to follow the rise

¢ Foreign Direct Investment (FDI) decreased but remained at a high level:

Vietnam has the advantage of having seen a sharp increase in FDI inflows for two years in a row In 2018, total FDI into Vietnam reached 35 billion dollars, rising to $ 38 billion in 2019 According to the Hit Price of the World Organization and Development Conference, the entire amount of FDI committed is only approximately 19 percent, with global FDI predicted to decrease 30-40 percent

e High growth private investment:

Vietnam's private sector is a significant contributor to the country's economic development The private sector accounts for roughly 40% of GDP If private investment increased by 1%, Vietnam's GDP would improve by more than 0.15 percent, making it a major growth engine for the Covid-19 translation's economic recovery

b Overview of Vietnam’s macroeconomic situation in the third quarter 2021 growth by sector

When the epidemic prevention initiatives are implemented, the global economic situation will improve in the future The economy, on the other hand, is developing differently Global trade continues to improve, but at a slower pace; inflation rises but remains under control globally The epidemic has disrupted the global value chain, posing a substantial challenge to countries’ manufacturing and business activity.

Domestically, our country's macroeconomy stabilized and began to prosper in the first months of 2021 However, the Covid-19 pandemic, which began in late April, has had a significant impact on life, health, livelihood, production, and commercial activities

Final consumption increased by 1.6 percent in the first nine months of 2021 compared to the same period in 2020; accumulated assets climbed by 4.27 percent; export of goods and services increased by 14.21 percent; import of goods and services increased by 18.46 percent Due to sickness, GDP barely expanded by 1.42 percent in the first nine months of 2021 compared to the same period last year Agriculture, forestry, and fisheries grew by 2.74 percent, accounting for 23.52 percent of overall growth; industry and construction grew by 3.57 percent, accounting for 98.53 percent; and the service sector shrank by 0.69 percent, accounting for 22.05 percent Agriculture, forestry, and fisheries accounted for 12.79 percent of the economy in the first nine months of 2021; industry and construction accounted for 38.03 percent; service sector accounted for 40.19 percent, and product tax without product subsidies accounted for 8.99 percent 1.2 Labor force and Unemployment

In general, the labor force tends to decrease in 2020-2021 As of the first quarter of 2021, the whole country had 51.0 million people in the workforce, down 1.1 million people compared to the previous quarter and a fall of 180.9 thousand compared to the same period last year The workforce participation rate in the first quarter of 2021 was estimated at 68.7%, down 1.6 percentage points compared to the previous quarter and fell 1.1 percentage points compared to the same period last year

76.6 76.4 76.6 76.5 76.5 76.4 76.6

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74 72 70.3

69.8 70 68.7 68.5

= LÍ LÍ

Jul 2018 Jan 2019 Jul 2019 Jan 2020 Jul 2020 Jan 2021 Jul 2021

In terms of national scale, the number of unemployed people at the fourth age under the Law in the third quarter of 2021 is over 1.7 million people, an increase of 532.2 thousand people compared to the previous quarter and up 449.6 thousand compared to the same last year The unemployment rate of 3.98% is the highest increase in the last 10 years

1.3 Enterprises performances

Since the appearance of Covid-19, Vietnam's economy can still maintain growth with an estimated GDP growth of 2.91% However, Delta variants have caused a shock to Vietnam, Vietnam's economic growth forecast in 2021 is only 2-2.5%

In 2020, about 72.3% of domestic private companies surveyed in Vietnam claimed that the effects of the Covid-19 pandemic on their businesses were mainly negative Compare, about 74.5% of FDI enterprises are investigated to assess the impact of the same pandemic

@ Completely positive @ Mostly positive No effect @ Mostly negative @ Completely negative

Source: Statista.com | Impacts of the COVID-19 pandemic on enterprises in Vietnam in 2020

PART 2: IN-DEPTH IMPACT ANALYSIS OF THE COVID-19 PANDEMIC ON SELECTED COUNTRY'S ECONOMY

2.1 GDP & Economic growth

AD;

In this context, the total supply and demand also fluctuated quite a lot compared to previous years Model analysis aggregate demand increased due to people's fear, speculation and hoarding for use during the pandemic, even in some items such as necessities, food also increased sharply The total supply has been greatly affected by social distancing, and necessary measures by the government and businesses to fight the epidemic The curve will shift to the right from AD1 to AD2 and AS1 to AS2 From the initial equilibrium EO (Y0, PO) to the new equilibrium E1 (Y1, P1)

In our opinion, Vietnam's economic growth in 2021 will change quite complicatedly during the Covid-19 pandemic

Tăng trưởng kinh tế Việt Nam 2011 - 202

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6.24 6.24

In 2021, Vietnam's economic growth reached 2.58%, the lowest level in 30 years In the context of a serious decline in the world economy and the break in the supply chain, Vietnam's GDP in 2021 has the lowest growth rate in the period of 2011-2021 but is a notable success compared to most other economies in the world

Vietnam's economy also has other complex developments This year, Vietnam is no longer as lucky as last year because of the impact of Covid-19 epidemic Vietnam's economic growth fell into negative growth in the third quarter (-6.02%) then developed in the fourth quarter, at 5.22% Regarding the overall growth rate of the economy, the agriculture, forestry and fishery sector increased by 2.9%, contributing 13.97% compared to the growth rate of the total value added by the entire economy Economic, industrial and construction increased by 4.05%, contributing 63.80% and service sector increased by 1.22%, contributing 22.23%

Overview of Vietnam's economy in 2021

GDP Viet Nam in 2020 and 2021

Stretching effects-19, global trade stress leads to strengthening trade protectionism and serious financial risks Domestic consumption continues to be low due to corporate and household income, the unemployment rate increases and many businesses stop working Uneven investment prospects, private investment still weak and foreign investment related to trade continues to decline Covid-19 pandemic has a very bad impact on businesses in Vietnam According to

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statistics, the most negatively affected subjects are new businesses operating less than 3 years and micro-enterprises The main impact is: businesses have difficulty accessing customers, the supply chain is broken, unbalanced cash flow and labor-management difficulties According to the General Statistics Office, in 2021, Vietnam has 55 thousand businesses suspending business for a period of determination (up 18% compared to 2020), 48.1 thousand businesses suspending activities are waiting for rules Dissolution submission (up 8% compared to 2020) On average, nearly 10,000 businesses withdraw from the market every month

2.2 Quality of critical understanding and evaluation

With the analysis of GDP and economic development in the context of Covid-19 pandemic in the period 2020-2021, this is evaluated and what can be learned from the analysis

2.2.1, Impact of Covid pandemic on everyone's life

In the period 2020-2021, there were 4 translation waves While in the first nine months of 2021, Vietnam has more than 1.3 million unemployed workers, 1.3 million workers have to return to their hometown due to lack of work and life is difficult, making their income Seriously affected According to the General Statistics Office, since March 20, 30% of households have had lower income than in March 2020 About 12% of these households suffer financial difficulties when they lose At least 50% of their income, resulting in people's spending tightening or worse, having to sell or mortgage in-house valuable assets to existing through a pandemic The price of products also increased many times due to scarcity of supply Moreover, entertainment and tourism activities also fell sharply due to disease prevention regulations

2.2.2 Impact of the COVID pandemic on companies, enterprises, and different industries

At this time, many companies and businesses have to suspend operations or worse, declare bankruptcy, and the epidemic is one of the main causes This is a challenge for businesses to innovate to match the needs of the market in order to survive and thrive under these difficulties:

¢ About tourism and hotel industry

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This is undoubtedly the industry most affected by the epidemic Public transport also had to stop working, international and domestic flights had to be suspended indefinitely to prevent the epidemic Most hotels, resorts, and entertainment areas had to close, causing tens of billions of dollars in damage Covid-19 has changed the usage behavior of people Tourists are paying more attention to health and safety factors, and travel plans are often close to the time of the trip so they can be changed flexibly Therefore, businesses always have to change constantly to adapt to the market

¢ About the construction and real estate industry

In the context of reality, it is not surprising that everyone decides not to invest in real estate According to the Ministry of Construction, the consumption rate of residential properties is only about 40% against the amount offered in the market; And the absorption rate of the lots is higher, about 50% of the market's output Moreover, the construction industry has to face the situation of material reduction, lack of human resources, and salary debt, which makes the construction progress of works decrease However, this is also an opportunity for economic planners in general and real estate developers in particular to have the opportunity to think about long-term strategies

e About the trade and service sector

Because of social distancing, restaurants and markets are often closed However, in the later stages of the pandemic, with the recovery of the economy, especially the rise of e-commerce, many people's shopping habits change E-commerce growth rate reached 18%, scale of 11.8 billion USD Survey results of the Ministry of Industry and Trade show that Vietnam will have 49.3 million people participating in online shopping in 2020

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