Vietnam's economic outlook for the first six months of 2021

The General Statistics Office (GSO) of Vietnam has released economic data for the second quarter and first six months of 2021. As a consequence, GDP is predicted to increase 6.61 percent in the second quarter compared to the same period last year. The GDP growth rate increased by 5.64 percent in the first six months.

GDP growth

Vietnam's GDP is expected to expand by 6.61 percent in the second quarter of 2021 compared to the same period last year, which is greater than the 0.39 percent growth rate in the same period in 2020. Agriculture, forestry, and fishing climbed by 4.11 percent, while the manufacturing and construction sectors expanded by 10.28 percent and the service sector increased by 4.3 percent.

In terms of GDP utilization in the second quarter of 2021, final consumption climbed by 3.18 percent over the same time last year; asset accumulation increased by 6.05 percent; goods and services exports increased by 29.81 percent; and goods and services imports increased by 28.53 percent.

The GDP growth rate for the first six months of 2021 was 5.64 percent, which was higher than the number for the same period in 2020. Agriculture, forestry, and fisheries expanded by 3.82 percent, providing 8.17 percent to overall economic growth; the manufacturing and construction sectors increased by 8.36 percent, giving 59.05 percent; and the service sector increased by 3.96 percent, contributing 32.78 percent.

The agriculture, forestry, and fishery sectors accounted for 12.15 percent of Vietnam's economic structure in the first half of 2021; the industrial and construction sectors accounted for 37.61 percent; the service sector accounted for 41.13 percent; and product tax minus product subsidies accounted for 9.61 percent (the corresponding structure of the same period in 2020 was 14.16 percent ; 33.51 percent ; 41.99 percent ; 10.34 percent ).

Investment

At current prices, realized investment capital was anticipated to be 661.1 trillion VND in the second quarter of 2021, a 7.8 percent increase over the same period last year. Total realized investment capital at current prices reached 1,169.7 trillion VND in the first six months of 2021, up 7.2 percent from the same time last year.

The entire foreign investment capital in Vietnam as of June 20, 2021, comprising newly registered capital, adjusted registered capital, capital contribution, and share acquisition by foreign investors, was about 15.27 billion USD, an 18.5 percent decline from the same period previous year. There were 804 newly licensed projects with registered capital of $9.55 billion USD, a decrease of 43.3 percent in the number of projects and an increase of 13.2 percent in the registered capital.

Industrial production

The GDP growth rate in the first six months of 2021 was 5.64 percent, greater than the rate in the same time in 2020. Agriculture, forestry, and fisheries climbed by 3.82 percent, accounting for 8.17 percent of overall economic growth; manufacturing and construction increased by 8.36 percent, accounting for 59.05 percent; and the service sector increased by 3.96 percent, accounting for 32.78 percent.

In the first half of 2021, the agricultural, forestry, and fishery sectors accounted for 12.15 percent of Vietnam's economic structure; the industrial and construction sectors accounted for 37.61 percent; the service sector accounted for 41.13 percent; and product tax minus product subsidies accounted for 9.61 percent (the corresponding structure in 2020 was 14.16 percent ; 33.51 percent ; 41.99 percent).

Business Registration

In June 2021, there were 11.3 thousand newly founded firms with a total registered capital of 164.3 trillion VND, and the number of registered workers was 71.9 thousand. This corresponds to a 2.5 percent decline in the number of firms, a 9.1 percent increase in registered capital, and a 0.4 percent decrease in the number of employees compared to May 2021. In June, the average registered capital of a newly founded firm reached 14.5 billion VND, up 11.9 percent from the previous month and 43.4 percent from the same period last year.

Imports and exports of services

Service export turnover was 891 million USD in the second quarter of 2021, down 18.6 percent from the same time previous year, while service import turnover was 4.8 billion USD, up 18.3 percent year on year

Service export turnover was predicted at 1.77 billion USD in the first six months of 2021, a 68.5 percent decrease from the same time last year. Tourism services export turnover was 82 million USD (4.6 percent of total turnover), down 97.4 percent; transportation services export turnover reached 147 million USD (accounting for 8.3 percent), down 80.8 percent.

Customer price index and inflation

The consumer price index (CPI) climbed by 0.19 percent in June 2021 compared to the previous month, 1.62 percent compared to December 2020, and 2.41 percent compared to the same time in 2020. The average CPI grew by 0.45 percent in the second quarter compared to the previous quarter and by 2.67 percent compared to the same period in 2020. In the first six months of 2021, the average CPI grew by 1.47 percent compared to the same period in 2020

In June 2021, core inflation climbed by 0.07 percent over the previous month and by 1.14 percent over the same period last year. In the first six months of 2021, average core inflation climbed by 0.87 percent compared to the same period previous year

By Hanh Tran

References

1. GSO, July 14, 2021. Vietnam’s economic overview. Vietnam Credit. Retrieved from https://vietnamcredit.com.vn/news/vietnams-economic-overview-2q2021_14432

2. VNA, Friday 25 february 2022. Investment funds pour more money into Vietnamese startups. retrieved from https://en.vietnamplus.vn/Utilities/Print.aspx?contentid=222628

3. Saigoneer, 29 september 2021. In Q3 of 2021, Vietnam’s economy shrinks fot the first time since 2000. Retrieved from https://saigoneer.com/vietnam-news/20630-in-q3-of-2021,-vietnam-s-economy-shrinks-for-the-first-time-since-2000