MACROECONOMICS – BÀI LUẬN 1) Analyze the impacts of the Covid-19 pandemic on Vietnam’s economy through AD-AS model in the short-run (remember to clarify in two stages: before and after government’s intervention) Impacts of COVID 19 on Vietnam economy The outbreak of COVID-19 has brought upon unprecedented challenges, and is expected to have a significant impact on Vietnam's economic development this year Vietnam’s economy is highly dependent upon other economies Following its accession to the WTO in January 2007, a notable trait of the Vietnamese economy over the past decade has been its substantial and increasing interconnection with other economies, via trade and investment Two of the major drivers that have been essential for the previous growth and economic development are: the level of foreign direct investment in the country, and the country’s capacity for export The economy faced many difficulties and suffered many impacts from the pandemic: decline in both aggregate supply and demand, GDP growth rate and many other macroeconomic indicators are the lowest in the past five to 10 years… That is the trend of enterprises leaving the market at a relatively high rate (up 23%), including large enterprises, showing that the resilience of many enterprises has reached the limit; trade balance tends to favor trade deficit; real estate, gold and securities markets still have potential risks; Vietnam's attractiveness to foreign investors tends to decrease; slow disbursement of public investment (only reached 22.12% of the year plan); disbursement of foreign capital is very low (only 2.97%); people's life is difficult, especially workers in industrial zones From April 27 to now (the fourth wave of the epidemic), 9.1 million Vietnamese people have been affected by the epidemic, of which 540,000 have lost their jobs and are underemployed It is very worrying that the epidemic is attacking export processing zones and industrial zones, disrupting production Dung also expressed concern that when major economies such as the US, EU, and China recover, especially after vaccination, Vietnam's slow implementation of vaccination also "partially" causes " Vietnam's potential has lost a certain position", "that potential has fallen to some brothers, including China" Although the COVID-19 pandemic has impacted many areas of our economy, the focus is on two main factors: aggregate supply and aggregate demand For the demand factor, the COVID-19 epidemic along with the implementation of necessary and mandatory social distancing measures according to Directive No 16/CT-TTg, dated March 31, 2020, of the Prime Minister, "On the implementation of urgent measures to prevent and control the COVID-19 epidemic" caused a sharp decline in domestic consumption Meanwhile, major economies (US, China, EU, Japan, South Korea) were also greatly affected by the epidemic and implemented social distancing measures, leading to a decline in economic growth leading to a decrease in import demand, including goods imported from Vietnam According to the General Statistics Office, in the first months of 2020, the total retail sales of consumer goods and services decreased by 0.8% compared to the same period in 2019, and if the price factor is excluded, it will decrease even more stronger, at 5.3% (up 8.5%) in the same period in 2019 In which, retail sales of goods in the first months of 2020 increased by 3.4% over the same period in 2019 Essential items for life such as food, food, utensils, tools and equipment family gain; but items such as apparel, means of transport, cultural products, and education are heavily affected by social distancing measures with a decreasing rate Also in the first months of 2020, revenue from accommodation and food services decreased by 18.1% over the same period in 2019; tourism revenue decreased by 53.2% - this is the sector most severely impacted by the COVID-19 epidemic and from the implementation of social distancing measures For external demand, there was also a decline In the first months of 2020, export turnover decreased, of which the domestic economic sector's export turnover increased by 11.7%; FDI sector (including crude oil) decreased by 6.7% Thus, the domestic economic sector still maintains an increase in export turnover of over 10%; The FDI sector has a decrease in the export value of goods in 2020 and an increase in 2019, thus making the export turnover of the economy increase in 2019 and decrease in 2020 This situation shows that the export turnover of the FDI sector will increase Our country's economy is very dependent on the FDI sector and the COVID-19 pandemic has negatively impacted investment and the global value chain is also affecting the export of our economy In general, due to the impact of the COVID-19 pandemic, the economy's demand (consumption, investment, export) decreased, thereby reducing production activities and economic growth The Government's measures currently being implemented are mainly aimed at stimulating aggregate demand and restoring production As for the supply factor, the COVID-19 pandemic disrupts input and labor supply chains For example, in the auto industry, due to scarce input components along with the implementation of social distancing, domestic automobile manufacturers such as Honda, Nissan, Toyota, Ford, and Hyundai must declare announced to suspend production, only when the social distancing period ends and supply chains are reconnected, will auto manufacturing businesses return to operation P AD1 AD P SRAS0 AD SRAS1 P P0 AD1 SRAS0 SRAS1 P0 P Y* Y businesses, especially those with foreign experts and foreign Y*Many Y* * Y* Y* are 1heavily affected by COVID-19 when workers, the labor supply is in short supply Labor costs during this period are also higher when businesses have to invest in more masks, antiseptic water, and implement safety measures at work to avoid virus infection The government has also implemented expansionary fiscal and monetary policies, lowered some taxes, and negotiated free trade agreements (FTAs) such as the EVFTA and UKVFTA, all of which have helped to stabilize the economy and boost various industries and foreign commerce The Vietnamese government has launched an assistance package to fight rising unemployment and increase FDI as well as social security employees, employers, poor and vulnerable people and spent a lot on public investment ... sector and the COVID- 19 pandemic has negatively impacted investment and the global value chain is also affecting the export of our economy In general, due to the impact of the COVID- 19 pandemic,... services decreased by 18.1% over the same period in 2 019; tourism revenue decreased by 53.2% - this is the sector most severely impacted by the COVID- 19 epidemic and from the implementation of social... of the Prime Minister, "On the implementation of urgent measures to prevent and control the COVID- 19 epidemic" caused a sharp decline in domestic consumption Meanwhile, major economies (US, China,