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Industry is still the main driving force for economic growth in the first half of 2020. Photo: ST

GDP grew quite well during the pandemic

By the end of the first quarter, many forecasts for the second quarter GDP growth will be very difficult, even negative growth due to the Covid-19 pandemic having a strong impact on the economy. However, according to new data released by the General Statistics Office, the economic growth in the second quarter of 2020 is estimated to increase by 0.36% over the same period last year, the lowest increase of the second quarter of every year in the last decade.

According to Ms. Nguyen Thi Huong, Deputy Director General in charge of the General Statistics Office, Q2 was the quarter when the economy was most heavily affected by the Covid-19 pandemic when the Government instructed to implement solutions on social distancing. With the growth rate of 0.36% in the second quarter, GDP of the first six months of 2020 increased by 1.81%, which is also the lowest growth rate of the six months of the years in the period 2011-2020.

“In the context of the complicated development of the Covid-19 pandemic, which negatively affects all socio-economic fields, we place top priority on epidemic prevention and control and sacrifice economic benefits to ensure our lives and the health of the people. This is a solid foundation for our country's economy to continue to grow without falling into negative growth. Compared to other countries in the region and the world, the figure of 1.81% is still good growth. The driving force for economic growth is industry, manufacturing and processing,”Ms. Nguyen Thi Huong said.

The International Monetary Fund predicts that global growth may drop by 4.9%, while the Organization for Economic Co-operation and Development forecasts that if Covid-19 breaks out for a second time, global GDP could drop by 7.6%. According to Mr. Duong Manh Hung, Director of the National Accounts System Department (General Statistics Office), international organizations assess that Vietnam's growth is greatly affected by Covid-19 and Vietnam is not the country most affected by the pandemic.

Despite the lowest GDP growth in many years, many economic development indicators decreased compared to the same period in 2019, but there are still some positive signs. In the first six months of 2020, the added value of the industry increased by 2.71%, of which the processing and manufacturing industry increased by 4.96%. Now, the pandemic is soon under control, all sectors of the economy are entering a normal operating state, industrial production has prospered and gradually regained a high growth momentum since May 2020.

Besides, after two months of easing and removing social separation measures, socio-economic activities are gradually being restored. Enterprises quickly adapt, adhere to the Government's supportive policies, gradually bring production and business activities back to operation. In the first six months, the whole country had more than 62,000 newly established enterprises, down 7.3% compared to the same period in 2019.In June alone, newly established enterprises continued to prosper with 13,700 enterprises, an increase of 27.9% over the previous month.

There are still varieties of opportunities

According to Mr. Duong Manh Hung, if in 2020, to keep growing at 6.8% per year, economic growth in the next two quarters will have to reach over 10% per quarter. This is an extremely difficult task, if not impossible because of the complicated disease situation, global trade is very difficult. The Government has submitted to the National Assembly a revised growth target for 2020 and it has not been approved yet. However, Mr. Hung also emphasized that we still have opportunities for growth in public investment.

Clarifying how accelerating public investment disbursements will support economic growth in 2020, Mr. Pham Dinh Thuy, Director of Department of Industry and Construction Statistics (General Statistics Office), said that public investment will stimulate the economy and increase production value. If public investment increases by 1%, it will contribute 0.06 percentage points to GDP growth and lead to an increase of 1.34 percentage points in the construction industry. If the disbursement of VND700,000 billion of public investment is completed this year, the GDP will increase by 0.42 percentage points.

The representative of the Department of Industry and Construction Statistics also said that in the first six months, the disbursement of convention investment is over 33%. Public investment mainly comes into the infrastructure sector, creating a driving force for development, which is the primer for capital flows and other production values. Regarding solutions to promote public investment in the future, besides controlling the pandemic, performing urgent tasks for production and business. On the business side, Mr. Thuy said that businesses need to find business partners, promptly remove difficulties and promote the efficiency of investment capital of enterprises and the whole economy.

Regarding solutions to promote economic growth from now to the end of the year, Ms. Nguyen Thi Huong said, firstly, it is necessary to continue reforming processes and procedures for enterprises to access simple and convenient support policies. Supporting the business community in finding import markets for raw materials, fuels, materials, spare parts and components, removing difficulties and maintaining production and business activities; mobilize people to prioritize the use of domestic goods, support businesses to produce and consume products in difficult times. In addition, accelerate the disbursement of public investment in the plan for 2020, remove difficulties for slow-disbursed projects, especially key, large-scale and pervasive projects in order to realize currently breaking ground on strategic infrastructure, improving production capacity of the economy such as expanding Tan Son Nhat International Airport, Noi Bai, building new Long Thanh International Airport, North – South Expressway.

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"At the same time, continuing to stimulate investment demand in manufacturing enterprises for exports to proactively source goods when the markets of other countries in the world reopen normally and take advantage of opportunities from the EVFTA that will come in force from August 2020,”Ms. Nguyen Thi Huong said.