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Trade and investment moving in the right direction

26/01/2021

According to the General Statistics Office, economic growth in the fourth quarter of 2020 reached 4.48%, compared with 2.69% in the third quarter of 2020 (updated compared to the previous figure of 2.62%. ). This result surpasses the expectation and prediction of economic analysts of 4%.

According to UOB Bank Vietnam, for the whole year 2020, Vietnam's economy recorded a growth rate of 2.91%, higher than the estimate of UOB which is 2.7%. Vietnam is one of the few countries with positive growth when the COVID-19 pandemic is still spreading around the world.

Contribution from economic sectors in the fourth quarter of 2020 improved as life returned to normal, although still lower than before the COVID-19 pandemic. Industrial production continues to be the main contributor to growth in 2020, while the service sector has been strongly affected by the pandemic and social distancing measures, especially in Q2.

In 2020, the contribution of the industrial sector increased 1%, or nearly one third of the full year growth, while the contribution of services decreased slightly at 0.9%. This trend is in contrast to the pre-pandemic level when the service sector was the main growth driver, said Mr. Suan Teck Kin - Head of Research, UOB Bank.

Other data also showed that economic growth gradually recovered. Exports increased by 17.5% in December compared to the previous year, while imports surged 23.3%, and foreign trade recovered sharply after bottoming out in May.

For the whole year 2020, Vietnam's exports increased by 6.4% (compared to 8.1% in 2019), imports increased by 3.2%, with a trade surplus rising to a record USD 19 billion. In 2020, the three largest export products of Vietnam are telephones and phone components (valued at USD 50.9 billion, decreased by 1% from the previous year); computer and computer accessories (USD 44.7 billion, increased by 24.3% from the previous year) and textile (USD 29.3 billion, decreased by 10.8% from the previous year).

The consumer price index increased by 0.19% from the previous year in December, for the whole year the average inflation rate was 3.2% (the baseline inflation rate was 2.3%). The Government continues to set inflation at 4% on average in 2021.

Although foreign direct investment into Vietnam decreased 25% to USD 28.5 billion due to limited travel and investor sentiment was affected, foreign enterprises continued to inject USD 6.4 billion into current FDI projects, corresponding to an increase of 10.6% over the previous year, promising a positive outlook in the near future.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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