/WB: 'Vietnam's economic situation continues to improve'
WB: 'Vietnam's economic situation continues to improve'

WB: 'Vietnam's economic situation continues to improve'

WB: ‘Vietnam’s economic situation continues to improve’

The WB believes that Vietnam’s economic situation is improving and the Government The government needs fiscal policy support to boost demand from the private sector and help with economic recovery.

According to the report “Vietnam Macroeconomic Update In December 2021” of the World Bank (WB), the index of industrial production of Vietnam increased by 5.5% in November (compared to the previous month), partly thanks to the recovery of economic activities in Vietnam. southern provinces, including in HCMC (up 13.3% from last month).

With a strong recovery in November, the index of industrial production exceeded the level recorded in the same period last year. The most dynamic sectors were manufacturing, food processing, tobacco, textiles, rubber products, plastics and metals with double-digit growth rates (year-on-year).

Manufacturing of electronic products, computers and optical products also grew well at 8.5% (compared to the same period last year).

Industrial production, retail sales of goods and services all grew

The Purchasing Managers’ Index (PMI) in the processing and manufacturing sector reached 52.2 in the month 11, equivalent to October and above the neutral threshold of 50.0, indicating continued improvement in the economic situation.

Total retail sales and sales revenue from consumer services increased by 6.2% in November (month-on-month), thanks to continued recovery in domestic demand. Even so, this index is still 12.2% lower than the level recorded in November 2020.

Compared to retail goods (up 5.2% month on month) before), consumer services revenue was hit harder by social distancing measures during the third quarter, but also recovered more strongly after these measures were removed (up 12, 5% over the previous month). However, both are still lower than the same period last year.

Merchandise export turnover reached a record high of 31.9 billion USD, helping to maintain the trade balance surplus for the second consecutive month, while direct investment capital Foreign direct investment (FDI) registered to recover after falling in October.

Industrial production recovered strongly strong, once again demonstrating good resistance. Photo: WB.

Credit to the economy is estimated to increase by 13.9% in November (year-on-year), equivalent to the increase in October and September.

Speed This credit growth is much higher than nominal GDP growth, thereby providing ample liquidity to support businesses through the crisis.

With credit With stable growth, overnight interest rates on the interbank market were kept at an average of 0.63%, equivalent to the interest rates in October and September.

Inflation increased slightly

After two months of decline, the consumer price index

(CPI) increased by 0.3% in the month 11 (compared to last month). This trend partly reflects higher transport costs (3.1% month-on-month) due to higher fuel prices, recovering domestic demand for non-food products, and rising costs of transportation. logistics increased.

Food and food prices still followed a downward trend, down 0.2% month-on-month thanks to a stable supply chain. Compared to the same period last year, CPI increased by 2.1%, slightly better than October, but still much lower than the target of 4.0% of the State Bank of Vietnam.

The government continued to tighten fiscal policy and balance the budget continued to have another surplus month thanks to the increase in budget revenue.

According to the World Bank, the policy of co-existence With the virus requires the authorities to remain vigilant and act quickly. Although the mortality to total number of infections is on a downward trend, the number of new infections is increasing rapidly.

Total retail sales of consumer goods and services continued to improve, but did not fully recover to the level of November 2020. Photo: WB.

Inflation increased slightly due to an increase in fuel prices and improved domestic demand for items other than food and foodstuffs. Photo: WB.

“That’s why, besides continuing to accelerate the injection campaign, vaccines, cautious measures of social distancing, testing and medical isolation still play an important role to avoid leading to a new wave of infections, affecting lives and forcing the application of measures. new limitations”, emphasized the WB.

According to the WB, in terms of fiscal policy, in the coming time, it is clear that it is necessary to support demand promotion from the private sector to help restore revitalizing the domestic economy and contributing to growth.

“The necessary direction to serve this goal is to provide financial support to affected workers and households. “, stated the WB report.

“Given the existing fiscal space and recognized difficulties in implementing the 2021 budget, the Government may consider the following options: measures on budget revenue to support domestic aggregate demand, which could be a reduction in value-added tax in 2022 to support consumption u use private. In addition, it is necessary to continue to closely monitor the financial sector,” added WB.

Thao Phuong

ZING

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