WB: Vietnam’s economy is gaining momentum

The World Bank (WB) made the above statement in the macroeconomic update of Vietnam in May 2022.

Accordingly, the decreasing trend in the number of new infections and deaths related to COVID-19 has helped Vietnamese people feel more secure to return to economic and social activities. Visitors to restaurants, shopping malls, and retail and entertainment venues have reached pre-COVID-19 levels.

Vietnam’s economy is gaining momentum. (Artwork – Photo: VN Media)

Besides, retail sales growth was lifted from 10.4% in March to 12.1% in April (year-on-year) as domestic demand, which was being consolidated, continued to be strong. more thanks to people increasing spending on 2 long holidays and international tourists have started to return. This is the first time retail sales growth has returned to pre-pandemic pace.

The recovery of consumer services was led mainly by booming accommodation and food revenue (up 14.8% year-on-year). About 101,000 international visitors came to Vietnam in April, the highest number in the past two years, but still less than 10% of the number of arrivals before the pandemic.

The index of industrial production in April increased by 9.4% (year-on-year), equivalent to the growth rate before the pandemic. Manufacturing of apparel, footwear, electronics, electrical appliances and metal products were among the most dynamic, recording double-digit growth rates. However, machinery and equipment manufacturing grew at a slower rate, falling from 26.6% in March to only 5.1% in April.

This deceleration is related to supply chain disruptions due to the blockade in China, which has led to a sharp decline in the import of machinery and equipment from this market in the past 2 months.

WB experts said that because Vietnam’s exports are highly dependent on raw materials and components imported from China, a prolonged supply chain disruption could negatively affect Vietnam’s exports in the coming months. , with high oil prices, fuel import turnover increased by nearly 120% (over the same period last year) and accounted for 9.3% of total import turnover in April, nearly double the rate of the same period last year. prior to.

According to a report by the World Bank, consumer price index (CPI) inflation increased from 2.4% in March to 2.6% in April. Compared with a year ago, gasoline prices are nearly 50% higher, because Therefore, this continues to be the biggest contributor to inflation through the transport group.

Food and food prices in April increased by 1.1%, equivalent to the rate of increase in March. Core inflation, excluding prices of food, foodstuffs, energy and commodities managed by the State prices, also increased from 1.1% in March to 1.5% in April, the highest rate since December 2020. Rising prices represent the effects of both supply and demand factors.

WB experts assess, despite the background Vietnam economy is gaining momentum, but is still not subjective with inflation and risks in maintaining export growth. Vietnam should still diversify its trading partners to ensure sustained export growth.

In addition, the uncertainty related to the tension between Russia – Ukraine causes the supply and prices of goods to weaken the worldwide economic growth; In which, it is difficult to avoid the impact on demand for Vietnamese exports.

In the coming months, supply chain disruptions due to the blockade in China could negatively affect Vietnam’s exports, WB experts said. If inflation persists in the medium term, allowing for price adjustments, the market should encourage investment to increase productivity and boost aggregate supply.

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