According to the General Statistics Office of Vietnam, GDP in the first quarter of 2020 is estimated to increase by 3.82% over the same period last year. This GDP growth rate is quite low compared to the same period of the previous years (7.38% and 6.79% in 2018 and 2019 respectively). However, the world economic growth is slowing down as well. Major economies such as the US, China, Japan, and the European Union (EU) are also witnessing a decline in economic growth.
Two GDP growth forecasts in the first quarter given by the Ministry of Planning and Investment were not achieved. Specifically, in the first forecast, the Ministry of Planning and Investment expected the Covid-19 epidemic to end in the first quarter, and the GDP growth of the first quarter would be 4.52% and the GDP for the year 2020 would be 6.25%. As for the other forecast, the Ministry expected that the Covid-19 epidemic would end in the second quarter, and the GDP growth of the first quarter of 2020 and the year 2020 would be 4.52% and 5.96% respectively. Thus, both forecasts were built with GDP in the first quarter increasing by 4.52%. However, reality shows that GDP in the first quarter only increased by 3.82%.
Regarding sector, agriculture, forestry and fishery increased by 0.08% (contributing 0.2% to the general growth); industrial production and construction increased by 5.15% (contributing 58.4%), of which processing and manufacturing increased by 7.12% (although the growth rate was not high, this sector still played the role of main driving force of economic growth in the first quarter of this year); service sector increased by 3.27% (contributing 41.4%), of which wholesale and retail increased by 5.69%, financial, banking and insurance activities increased by 7.19%.
In terms of economic structure in the first quarter of 2020, agriculture, forestry and fishery sector accounted for 10.11%; industrial production and construction sector accounted for 35.52%; service sector accounted for 43.71%; product tax minus product subsidies accounted for 10.66% (the corresponding structure of the same period in 2019 was: 10.15%; 35.31%; 43.99%; 10.55%).
From the perspective of use of GDP, final consumption increased by 3.07% over the same period in 2019, of which household final consumption increased by 2.92% (in the same period last year, it increased by 7.22%); accumulated assets increased by 2.20%; exports of goods and services increased by 1.59%; import of goods and services increased by 1.05%.
Manufacturing enterprises are optimistic about their business situation
According to the General Statistics Office, in the first quarter of 2020, there were 29.7 thousand newly registered enterprises with a total registered capital of VND 351.4 trillion and a total registered labor of 243.7 thousand employees, an increase of 4.4% in the number of businesses, and a decrease of 6.4% and 23.3% in registered capital and in the number of employees respectively, compared to the same period last year.
The average registered capital of a newly established enterprise in the first quarter of 2020 was VND 11.8 billion, down 10.4% over the same period last year. If including VND 552.4 trillion of additional capital of 9.1 thousand enterprises, the total registered capital added to the economy in the first quarter of 2020 would be VND 903.8 trillion, decreasing by 17.7% compared to the same period last year.
The first quarter of 2020 recorded 14.8 thousand enterprises returning to operation, down 1.6% compared to the first quarter of 2019. The number of enterprises temporarily suspending operation in the first 3 months was 18.6 thousand, increasing by 26% over the same period last year. The number of enterprises ceasing operation for dissolution was 12.2 thousand, down 20.6%. The number of enterprises completing dissolution procedures in the first quarter of 2020 was 4.1 thousand, equivalent to the same period last year.
The results of survey on business trends of enterprises in processing and manufacturing industries in the first quarter of 2020 shows that: 20.9% of businesses believed that the business situation in the first quarter of 2020 was better than that in the fourth quarter of 2019; 42% assessed that it was difficult and 37.1% thought that the business and production situation was stable. Thus, 58% of manufacturing enterprises believed that the business situation in the first quarter of 2020 was better than the previous quarter.
38.8% of businesses surveyed expected that the business situation in the second quarter of 2020 would be better than the first quarter; 25.9% forecasted that they would face more difficulties and 35.3% thought that their business and production situation would be stable.
Source: GSO
Writer: Bonny Le – VietnamCredit
