Government examines ways to revive production

Prime Minister Nguyen Xuan Phuc chairs an online national conference with localities discussing measures to cope with the (COVID-19) epidemic

In his speech, PM Phuc called for greater combined efforts to cope with the ongoing epidemic by taking more drastic measures, adding that Vietnam’s determination has been recognized by the international community and many international organizations such as the World Bank, the Asian Development Bank, and Fitch Ratings they have all been optimistic about Vietnam's economic economy in the time to come.

Fitch expects Vietnam’s growth momentum to rebound in 2021, with growth projected at 7.3% as external and domestic demand gradually recovers in line with global and regional trends.

However, some international organisations have a pessimistic view on this year's global economy outlook, with the International Monetary Fund predicting growth will stand at 0% whilst some countries still endure negative growth. The United Nations anticipates that the latest global recession will be larger than that of 2008.

In the current economic climate, the majority of domestic businesses are facing severe challenges and disrupted production value chains. For example, so far during April the textile industry has suffered a 30% fall in orders, while 80% of educational institutions have seen sales halved.

Minister of Industry and Trade Tran Tuan Anh believes that the COVID-19 epidemic will have a direct impact on approximately four million workers in the textile and footwear industry. According to the footwear business associations, the current market situation will see businesses halt operations by mid-April, adversely affecting roughly 800,000 employees.

If there are no positive signs by the end of April, approximately 1.2 million people employed in the leather and footwear sector, in addition to roughly 2.8 million workers operating in the apparel industry, will suffer the consequences of the economic downturn caused by the epidemic.

Further difficulties have been encountered in other areas due to drought, saline intrusion, and the spread of African swine fever. The first quarter of the year saw the country record economic growth of a mere 3.82%, the lowest level in ten years.

Minister and Chairman of the Government Office Mai Tien Dung said that enterprises have proposed extending tax payments to 12 months rather than five months as previously planned, whilst also expanding extended taxes, including corporate income tax, personal income tax, and value added tax.

In many previous meetings, PM Phuc has emphasized that there must be strong measures taken to disburse more than US$30 billion of public investment. Therefore, it is imperative to clarify the responsibilities of various Ministers, Chairmen of the local People's Committees, and investors, especially for key projects such as the North-South expressway and construction work on Long Thanh airport.

During the conference a number of ministers offered specific measures on how to best overcome epidemic-related difficulties facing the respective industries under their management, whilst also listening to consultations and suggestions which could serve as a basis for the government to work out considered solutions in a timely manner.