Production at MXP Manufacturing Sportswear Joint Stock Company at Nguyen Duc Canh Industrial Park, Thai Binh Province. (Photo: Viet Chung)   

NDO – The rate of enterprises turning to production is very high, showing the confidence of the business community in the resilience of the economy. The macroeconomic foundation remains stable, creating room for management.

Positive signs of economic recovery became clearer in November, when the Government’s Resolution No.128/NQ-CP dated October 11, 2021, on safe, flexible adaptation and effective control of the COVID-19 epidemic, was approved. All levels, sectors, business communities and people agreed, responded and actively implemented.

Enterprises return to the “race track”

A positive development, in the economic picture over the first 11 months of 2021, is the extremely high rate of enterprises returning to production and business.

According to the Business Registration Management Agency, under the Ministry of Planning and Investment, in November, the whole country had 4,958 enterprises resuming operations, the highest since the fourth wave outbreak of the COVID-19 epidemic with the Delta variant.

Of which, 36 out of 63 localities had a very strong increase in the number of enterprises re-entering the market compared to the previous month and 45 out of 63 localities had an increase compared to September.

In Ho Chi Minh City, 1,557 enterprises returned to the market, up 34.6% from the previous month and up 77.1% compared to September; Binh Duong had 154 businesses returning to operations, up 49.5% and 75%; Dong Nai, 80 enterprises, up 45.5% and 50.9%. In these localities, enterprises are concentrating resources to speed up production at the end of the year to improve revenue and at the same time look for new partners and markets.

Enterprises returned to the “race track”, leading the recovery of many important economic sectors. Industrial production continued to prosper clearly, the index in November was estimated to increase 5.5% over the previous month and up 5.6% over the same period. In the first 11 months of 2021, the industrial production index increased by 3.6% over the same period.

Notably, import and export continued to be a bright spot, with the trade balance of goods in November estimated at 100 million USD, in general, over 11 months, the trade surplus was 225 million USD.

Total retail sales of consumer goods and services was estimated to increase quite well, at 6.2% over the previous month when markets, trade centres, supermarkets, convenience stores, establishments and household businesses resumed operations in the new normal, providing many goods to meet people’s consumption needs.

Passenger and cargo transportation both increased compared to the previous month. This is also the time with recorded high growth in international arrivals, reaching more than 15,000 travellers, an increase of 42.4% over the previous month, due to Vietnam’s implemented pilot roadmap, to welcome international tourists.

Stable macroeconomic foundation

According to Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management, in the context of the economy's supply and demand having declined sharply since the third quarter due to the impact of the COVID-19 pandemic, the stable macro-economy continued to be a remarkable bright spot.

The expert quoted the dаta: currently, Vietnam's macro-economy has improved and is much more solid than in the 2011-2015 period. Specifically, the average inflation per year was 7.82% in the 2011-2015 period, and 3.15% in the 2016-2020 period; the average credit growth per year was 12.86% and 13.8%, respectively. The rate of devaluation of VND against USD in each period is 8.26% and 2.61% respectively; the balance of trade in goods compared to GDP was negative 1.5% and 3.2%; the ratio of public debt to GDP in 2016 was 63.7%, and 55.8% in 2020.

Meanwhile, by the end of the third quarter of 2021, the average inflation was 1.82%; credit increased by 7.2% compared to the beginning of the year and 13.3% over the same period; the value of VND increased by 1.5% compared to USD, the budget deficit was still low, and foreign exchange reserves were over 100 billion USD.

This is room for Vietnam to boost spending more on economic recovery in the coming years, Cung said, adding that it is necessary to take advantage of every opportunity in the recovery and development of the economy, Cung noted.

Regarding the economic situation at the end of the year, the General Statistics Office also noted some difficulties. That is, the revenue of the tourism and food services decreased sharply because people tightened spending in the context of the complicated development throughout the COVID-19 epidemic. Disbursement of public investment, although improved compared to the previous month, still decreased by 12.9% over the same period.

In addition, trade surplus was mainly concentrated in the foreign-investment sector (including crude oil), while the domestic economic sector had a trade deficit, showing that the capacity of domestic enterprise is still not strong enough to participate in a deeper and more extensive manner in regards to the global supply chain. In addition, the number of newly established enterprises are lower than the number of enterprises that have suspended operations or left the market entirely.

The Government also needs to continue to closely monitor and firmly grasp the situation and developments of the COVID-19 epidemic, as well as take flexible measures for specific situations in epidemic prevention and control associated with each step of reopening the economy.

Resources should be allocated properly and specific plans should be devised to improve the capacity of the healthcare system, effectively implementing the full vaccination strategy, as soon as possible for the people.

Workers at Cosmos Technology Co. Ltd, Khai Quang Industrial Park, Vinh Phuc Province, produce motorcycle components. (Photo: Hoang Ngoc)

It is necessary to implement synchronously, promptly and effectively, the mechanisms, policies and solutions to support people, employees, businesses, production and household businesses, to stabilise life and restore production and business.

Appropriate policies on fees and charges should be implemented to stimulate domestic tourism demand; ensure close coordination between state management agencies, relevant units and businesses in the pilot process of welcoming international tourists in a safe manner.

More attention should be paid to devise solutions to restore production and business in the new normal; improve supply and production capacity for businesses to meet the sharply increasing demand for goods and services when switching to the status of safe, flexible adaptation and effective control of the COVID-19 epidemic; and promote domestic consumption.

PHUONG ANH
Translated by NDO