Fiercely fighting the epidemic, strong economic recovery

Prof. Dr. Tran Tho Dat, a member of the Prime Minister’s Economic Advisory Group, expressed his opinion when analyzing the socio-economic panorama in the first 6 months of 2021 which has just been announced by the General Statistics Office.

“The economy’s resilience is quite good”

Prof. Dr. Tran Tho Dat said that the context of the first 6 months of 2021 takes place according to a scenario few people think of. By the end of 2020, everyone hopes that in the Vietnamese scenario, the translation will be better controlled. However, COVID-19 has had dangerous new variants, especially spreading in Asia, strongly affecting Vietnam in 2 waves in 6 months. The fourth wave from the end of April up to now is considered the most impactful wave.

The fourth outbreak of the epidemic had a very complicated development, large scale, the fastest spread ever, causing many difficulties for epidemic prevention and control, production and business activities, people’s lives in large urban centers and a number of key industrial zones.

With such a context, everyone thinks that it will have a great impact on growth rate, income, employment, import and export… However, with published data, the economy is still in a state of relatively good growth. . Comparison of growth data over the same period last year shows that: Gross domestic product (GDP) in the second quarter of 2021 is estimated to increase by 6.61% over the same period last year. 5.64%.

Back to the context of the second quarter of 2020 when Vietnam was being attacked by a wave of COVID-19 with the period when the country implemented social distancing, so the growth was very low, the first 6 months of 2020 grew only 1, 8%.

Therefore, the growth rate of the first 6 months of 2021 is quite a growth rate. In addition to measuring GDP growth, going into the component indicators will see the overall “health” of the economy.

Inflation also surprised many analysts. While leading economies are having a “headache” to solve the inflation problem. For example, the Fed (the US Federal Reserve) is thinking about stopping buying government bonds, adjusting interest rates because currently inflation in the US is the highest in many years.

For Vietnam, the inflation index is 1.47% in 6 months – the lowest in the last 5-6 years. Prof. Dr. Tran Tho Dat affirmed that our calculation of inflation and CPI still follow international practices, but we must also recognize that Vietnam is an open economy, exporting a lot and importing a lot as well. large, there are many value chains of the world’s supply of goods being implemented in Vietnam. However, we still have a way to control the rate of price increase in the current range. Vietnam can proactively increase prices in the fields of healthcare, education… Maybe in the last 6 months, inflation will increase but still within the target range set by the Government.

Back to GDP, Prof. Dr. Tran Tho Dat said that growth areas in the economy are basically quite stable. Raising the problem, why is the manufacturing and processing industry, the locomotive of the industry, still growing at 10%, while the industrial center of Bac Ninh and Bac Giang is seriously affected by the epidemic, he said. The General Statistics Office has also explained that without the epidemic, Bac Giang would grow by 30-40%, but now it is only growing by 20%. Bac Ninh would grow 20% without the epidemic, but because of the epidemic, it would only grow 10%. In terms of investment, the good thing is that the growth is very smooth in all 3 sectors: State, private, and FDI are approximately 7%.

Regarding import and export, in terms of overall export turnover is still growing strongly, about 30%. Exports have grown a little slower than imports, so we have a deficit, but according to Prof. Dr. Tran Tho Dat, when we assess the trade balance in the recovery process of the economy and macroeconomic indicators, should assess the whole picture for a long time. A quarter, a month has not said anything. Even a few years, a country may run a trade deficit because it imports machinery and equipment and that deficit will gradually decrease during the growth recovery. We have a modest deficit of 1.47 billion USD in 6 months which is not worrisome, only reflecting the transient state of the trade balance.

Our exports do not grow as fast as imports due to the impact of the epidemic in localities with many industrial zones. When those regions recover, our export growth will be higher.

GS. Dr. Tran Tho Dat, Member of the Prime Minister’s Economic Advisory Group. Photo: VGP/Phuong Lien

“Leave no one behind”

Consumption index showing the circulation of social goods grew by about 5.8% compared to the very low level of the same period in 2020 (negative growth). Obviously, the income of people in areas strongly affected by COVID-19 was seriously affected, millions of people were unemployed, laid off, and reduced their jobs. Recognizing this problem, the Government approved the second social security support.

Prof. Dr. Tran Tho Dat acknowledged that the 1st Social Security Support Package has been implemented in recent years, although only 22% has been disbursed, but it is difficult to maintain and extend further due to the current context. The current situation and conditions have changed. According to him, which businesses can access, which beneficiaries have been implemented, which components have not been disbursed because the conditions are no longer suitable, it is necessary to change both objects and conditions for receiving support to suit new circumstances.

Therefore, the proposed 2nd support package is necessary to target new people who need support to quickly restore production and business, help overcome difficulties in the past epidemics, and quickly stabilize their lives. live and work. According to the proposal of the Ministry of Labour, Invalids and Social Affairs, this social security support package has a total value of over VND 27,000 billion.

It should be affirmed that this is a very timely policy to support people and businesses facing difficulties due to the pandemic, with the goal of supporting affected workers and people, deeply reducing income, losing – lack of income. – relax jobs, create confidence for people to accompany the Government in realizing “dual goals”.

A rather “special” item of this “unprecedented” support package is support for both self-employed workers, without a labor contract, clearly demonstrating the spirit of “not letting anyone be harmed”. leave behind”. The supporting principles are defined as ensuring the right audience, providing sufficient and fastest support, publicity and transparency.

Opportunity named COVID-19 vaccine

In the difficult context, we still get 57% of the budget in 6 months due to the very strong development of the stock market… As for spending, we are the first priority of the frontline of epidemic prevention and control. The government is willing to spend VND 14,000 billion to buy a COVID-19 vaccine.

“The COVID-19 vaccine is also an opportunity to reduce government spending on tracing, treating and controlling the disease and is creating a far greater economic change than previous vaccines. The speed of economic recovery will depend on and have a close relationship with the progress of vaccine deployment, the higher the vaccination rate in the population, the sooner the economy will return to normal,” Prof. Dr. Tran Tho Dat commented.

Along with this recovery, a clear opportunity COVID-19 presents is changes in consumption habits, working methods and new business models after the pandemic. According to Prof. Dr. Tran Tho Dat, a “creative destruction” is waiting in many traditional economic fields such as: training, tourism, aviation, restaurants, commercial and residential real estate. … and from there how businesses have more motivation to change their marketing strategies and business methods.

We have been very successful, becoming a “bright spot” in tracing, isolating and treating in the prevention and control of the COVID-19 epidemic, but Prof. Dr. Tran Tho Dat assessed the current vaccination speed of Vietnam. Currently, it has not caught up with many countries.

The fourth outbreak is a very large and complex one, with the number of cases accounting for more than 60% of a total of nearly 15,000 cases so far. The number of suspected cases will increase, the need for testing will increase, and treatment will be very difficult and expensive. At the same time, the number of quarantined people has increased, the number of places that have to be locked down has also increased, creating a huge burden both in terms of health and economy.

According to Prof. Dr. Tran Tho Dat, with the potential risk of epidemic “spots” appearing whenever in the community like today, it is necessary to consider vaccines as an effective opportunity to reduce government spending in tracing tracing, treating and controlling epidemics, while ensuring the safety of the health system’s curative capacity.

If making the most of the capacity and conditions of the current health system, each person has enough 2 injections and if there is not any disruption in the supply chain, then there is enough capacity and facilities to injected for about 0.5% of the population a day, ie 500,000 doses/day. Thus, it is expected that by the end of 2021, herd immunity will be implemented. This expected number is much higher than the average vaccination rate in the past time.

Therefore, Prof. Dr. Tran Tho Dat noted, in order to rapidly increase vaccination capacity, it is necessary to soon develop and publicize vaccination programs and plans for people to achieve herd immunity with a timeline. Specifically.

Accelerating the speed of COVID-19 vaccination is a fundamental solution, decisive for a solid economic recovery, and early taking advantage of opportunities to maintain and promote the growth drivers. growth in exports and investment as Vietnam’s major trade and investment partners are on a strong recovery track.

Find the best possible solution

Currently, the Government’s socio-economic development scenario in the next 6 months is 6.5% – higher than the target assigned by the National Assembly (6%).

Prof. Dr. Tran Tho Dat said that, in order to achieve the target of 6%, the final months of 2021 must reach about 6.4%, if the growth momentum is still followed in the second quarter and we control the epidemic well, then human This number is “at hand”. But to achieve 6.5% full-year growth is more difficult, we have to grow 7% in the following quarters. The most likely solution would be a growth rate between 6% and 6.5%.

Prof. Dr. Tran Tho Dat said that in the coming time, our epidemic situation is still very complicated. The tracing, isolation and treatment in COVID-19 prevention and control is only suitable for small scale, large scale will consume a lot of society’s resources. The strategic, fundamental and sustainable solution is still the vaccine strategy!

We must implement “dual goals” flexibly, in places where the priority is to fight the epidemic, to fight the epidemic fiercely, in places where the epidemic is well controlled, a strong economic recovery must be carried out.

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