According to a recently released report by the World Bank, many important economic indicators indicate that Vietnam’s economy has shown signs of recovering after the epidemic.
As stated in this report, after being affected by the social distancing period in April, Vietnam’s Index of Industrial Production (IPP) in May rebounded 11% compared to April. However, it is still about 3% lower than the same period last year.
Retail sales also recovered strongly in May. Passenger and freight carriage increased by 116% and 32% respectively compared to April. The recovery is evidenced by Google’s travel index with an increase from negative 30% in mid-April to negative 5% during the week from 25-5.
Although Vietnam’s export turnover of goods increased by 5% compared to April, it was still 5.5% lower than the same period last year due to the fact that demands from Vietnam’s major exports market have weakened. In addition, disruptions in global supply chains are also among the causes of the decline in export turnover.
Exports of key labor-intensive industries of Vietnam such as textile and footwear decreased by 14% and 5% respectively (compared to the same period last year) while technology exports, such as smartphones, decreased by 9% (compared to the same period last year).
Foreign direct investment (FDI) inflows into Vietnam continued to increase in May but at a slower pace than in April. In the first five months of 2020, the committed value of FDI was estimated at USD 13.9 billion, which is considered high yet 17% lower than the same period last year.
In the first four months of this year, Vietnam’s total State budget revenue decreased by 5.9% compared to the same period last year. The largest reductions were recorded for value added tax and corporate income tax, at 9.3% and 7.3% respectively. Due to the decline in import and export activities, tax revenue related to import and export decreased by 19% (compared to the same period last year).
The General Department of Taxation informed that it has received 90,000 applications for extension of tax payment and land use fees, with a total value of up to VND 26,200 billion.