GROUP ASSIGNMENT ANALYZING VIETNAM’S ECONOMY although GDP growth in 2020 is the lowest in the 2011 2020

Ngọc Hà,2020 In the general growth rate of the whole economy, the agriculture, forestry, andfishery sector increased by 2.68%, contributing 13.5% to the growth rate of the totaladded val

DANANG UNVIVERSITY OF ECONOMICS

INTERNATIONAL BUSINESS

-GROUP ASSIGNMENT ANALYZING VIETNAM’S ECONOMY

1 Duong Thi Ngoc Tram

1 GDP 3

2 Unemployment rate 8

3 Balance of Trade 9

 VietNam’s trade balance in 2020 9

 VietNam’s trade balance in 2021 10

4 Base interest rate 11

 In 2020 11

 In 2021 13

5 CPI 14

 In 2020 14

 In 2021 15

6 Inflation 16

 In 2020 16

 In 2021 17

7 Labor productivity 18

8 Consumer spending 19

 In 2020 19

1 GDP

2020 is considered a year of great difficulties and challenges for the world economy ingeneral, including Vietnam The world economy is forecasted to have the most severerecession in history, and the growth of major economies will decrease deeply due to thenegative impact of the Covid-19 epidemic However, Vietnam's economy still maintainsgrowth with an estimated GDP growth rate of 2.91% (Tổng cục thống kê, 2021)

The Covid-19 epidemic has complicated developments, disrupting the ting economic activities of countries worldwide; the US-China trade conflict continues InViet Nam, natural disasters and epidemics have a significant impact on the activities ofthe economy and people's lives; unemployment and underemployment rates are high.However, with drastic and effective solutions in realizing the dual goal of "both diseaseprevention and socio-economic development", Vietnam's economy still achieved positiveresults with maintaining growth Although GDP growth in 2020 is the lowest in the 2011-

social-2020 period and suffering the negative impacts of the Covid-19 epidemic, it is a successfor our country with the highest growth rate in the group of countries in the world

(Tổng cục thống kê, 2021)GDP growth rate for the years 2011-2020 respectively is: 6.24%, 5.25%; 5.42%; 5.98%;6.68%; 6.21%; 6.81%; 7.08%; 7.02%; 2.91%

(Ngọc Hà, 2020)GDP in 2020 increased by 2.91% (in the first quarter, by 3.68%; in the second quarter by0.39%; in the third quarter by 2.69%; in the fourth quarter by 4.48%).

The GSO showed that the results mentioned above are due to the close inspection of theCovid-19 epidemic, the gradual recovery of the skin to new normal conditions, and theEVFTA agreement that took effect on August 1 Accordingly, economic growth in thefourth quarter was 1.86 percentage points higher than in the third quarter (Ngọc Hà,2020) In the general growth rate of the whole economy, the agriculture, forestry, andfishery sector increased by 2.68%, contributing 13.5% to the growth rate of the totaladded value of the whole economy; the industry and construction sector increased by3.98%, contributing 53%; the service sector increased by 2.34%, contributing 33.5%.(Tổng cục thống kê, 2020)

In the agriculture, forestry, and fishery sector, the output of the number of perennialcrops, main farming products, and shrimp production in 2020 increased quite well, so thegrowth rate of this area reached a higher level than in 2019 Which, agriculture increased

by 2.55%, only increasing at a lower rate in 2011, 2012, and 2018 in the period

2011-2020, contributing 0.29 percentage points to the value-added growth rate of the whole

economy; forestry increased by 2.82% but the utilization rate was low, contributing only0.02 percentage points; aquaculture increased by 3.08%, higher than the growth rate of2.8% in 2015 and 2016 in the period 2011-2020, contributing 0.1 percentage point (Tổngcục thống kê, 2020)

In the industry and construction sector, the industry in 2020 increased by 3.36%compared to the previous year, contributing 1.12 percentage points to the growth rate ofthe total added value of the whole economy Which, the processing and manufacturingindustry played a key role in leading the growth of the economy with an increase of5.82%, contributing 1.25 percentage points; electricity production and distributionincreased by 3.92%, contributing 0.19 percentage points; water supply, waste, andwastewater management, and treatment activities increased by 5.51%, contributing 0.04percentage points; Mining decreased by 5.62% (due to a decrease in crude oil production

by 12.6% and natural gas by 11.5%), reducing 0.36 percentage points in the overallincrease The construction industry increased by 6.76%, higher than the growth rate of

2011, 2012, and 2013 in the period 2011-2020, contributing 0.5 percentage points (Tổngcục thống kê, 2020)

The Covid-19 epidemic has complicated developments, seriously affecting commercialand service activities The service sector in 2020 achieved the lowest growth rate in theyears 2011-2020 Contributions of some market service industries with a large proportion

to the growth rate of total added value in 2020 are as follows: Wholesale and retailincreased by 5.53% compared to the previous year, contributing 0.61 points percent;financial, banking, and insurance activities increased by 6.87%, contributing 0.46percentage points; the transportation and warehousing industry decreased by 1.88%,decreasing by 0.06 percentage points; accommodation and catering services decreased by14.68%, down 0.62 percentage points (Tổng cục thống kê, 2020)

Regarding the economic structure in 2020, the agriculture, forestry, and fishery sectoraccount for 14.85%; industry and construction accounted for 33.72%; service sectoraccounted for 41.63%; product tax minus product subsidies accounts for 9.8%(corresponding structure in 2019 is: 13.96%; 34.49%; 41.64%; 9.91%) (Tổng cục thống

kê, 2020)

Regarding GDP use in 2020, final consumption increased by 1.06% compared to 2019;accumulated assets increased by 4.12%; exports of goods and services increased by4.97%; imports of goods and services increased by 3.33%.(Tổng cục thống kê, 2020)Quality of economic growth: labor productivity of the whole economy at current prices in

2020 is estimated at 117.9 million VND/worker (equivalent to 5,081 USD/worker, up 290USD compared to 2019) ; At constant prices, labor productivity increased by 5.4% due

to the improvement of workers' qualifications (the percentage of trained workers withdegrees and certificates in 2020 reached 24.1%, higher than the rate of 22.8% in 2019).(Tổng cục thống kê, 2020)

Gross domestic product (GDP) in the fourth quarter of 2021 was estimated to increase by5.22% over the same period last year, although higher than the growth rate of 4.61% in

2020 but lower than the growth rate of the fourth quarter of other years 2011-2019 Inwhich, the agriculture, forestry, and fishery sector increased by 3.16%; industry andconstruction increased by 5.61%; service sector increased by 5.42% Regarding GDPused in the fourth quarter of 2021, final consumption increased by 3.86% over the sameperiod last year; accumulated assets increased by 3.37%; exports of goods and services

increased by 14.28%; imports of goods and services increased by 11.36% (Tổng cụcthống kê, 2022)

It is estimated that GDP in 2021 will increase by 2.58% (in the first quarter, by 4.72%; inthe second quarter by 6.73%; in the third quarter by 6.02%; in the fourth quarter by5.22%) over the previous year due to the Covid-19 epidemic -19 seriously affected allsectors of the economy, especially in the third quarter of 2021, many key economiclocalities had to implement prolonged social distancing to prevent epidemics In thegeneral growth rate of the whole economy, the agriculture, forestry, and fishery sectorincreased by 2.9%, contributing 13.97% to the growth rate of the total added value of thewhole economy; the industry and construction sector increased by 4.05%, contributing63.80%; the service sector increased by 1.22%, contributing 22.23% (Tổng cục thống kê,2022)

In the area of agriculture, forestry, and fishery, the productivity of most crops is quitegood compared to the previous year, livestock has grown steadily, and the export turnover

of some agricultural products will increase in 2021, contributing to maintaining thegrowth rate leader of the whole region The agricultural sector increased by 3.18%,contributing 0.29 percentage points to the growth rate of the total added value of thewhole economy; the forestry sector increased by 3.88%, contributing 0.02 percentagepoints; the fisheries sector increased by 1.73%, contributing 0.05 percentage points.(Tổng cục thống kê, 2022)

In the industry and construction sector, the processing and manufacturing industrycontinued to be the growth engine of the whole economy with a growth rate of 6.37%,contributing 1.61 percentage points to the growth rate total value added to the wholeeconomy The electricity production and distribution industry increased by 5.24%,contributing 0.19 percentage points The mining industry decreased by 6.21%, down 0.23percentage points due to the decrease in crude oil production by 5.7% and gaseousnatural gas by 19.4% The construction industry increased by 0.63%, contributing 0.05percentage points (Tổng cục thống kê, 2022)

The complicated development of the Covid-19 epidemic since the end of April hasseriously affected commercial and service activities The negative growth of some serviceindustries accounted for a large proportion, reducing the overall growth rate of the servicesector and the whole economy The wholesale and retail industry decreased by 0.21%over the previous year, reducing 0.02 percentage points in the growth rate of the totaladded value of the whole economy; the transportation and warehousing industrydecreased by 5.02%, decreasing by 0.3 percentage points; the accommodation and foodservice industry dropped sharply by 20.81%, down 0.51 percentage points The healthsector and social assistance activities achieved the highest growth rate in the servicesector with an increase of 42.75%, contributing 0.55 percentage points; financial,banking, and insurance activities increased by 9.42%, contributing 0.52 percentagepoints; information and communication industry increased by 5.97%, contributing 0.36percentage points (Tổng cục thống kê, 2022)

Regarding the economic structure in 2021, the agriculture, forestry, and fishery sectoraccount for 12.36%; industry and construction accounted for 37.86%; service sectoraccounted for 40.95%; product tax minus product subsidies accounted for 8.83% (Tổngcục thống kê, 2022)

Regarding GDP use in 2021, final consumption increased by 2.09% compared to 2020;accumulated assets increased by 3.96%; exports of goods and services increased by14.01%; imports of goods and services increased by 16.16% (Tổng cục thống kê, 2022)

2 Unemployment rate

“The number of unemployed people of working age in 2021 was more than 1.4 million,

an increase of 203,700 people compared to the previous year The unemployment rate ofpeople of the working-age was 3.22%, an increase of 0.54 percentage points compared to2020.” (VietNam Global, 2022)

 Quarter I: The outbreak of Covid 19 for the third time just before and during the Lunar

New Year has increased significantly the number of unemployed workers The number ofunemployed people of working age in the first quarter of 2021 is 1095,4 thousand peopleand the unemployment rate of laborers the age in the first quarter of 2021 is 2.42%

 Quarter II: The number of unemployed people of working age in the second quarter of

2021 was nearly 1.2 million, an increase of 87.1 thousand people compared to theprevious quarter and a decrease of 82.1 thousand people compared to the same period lastyear The unemployment rate of working age in the second quarter of 2021 was 2.62%(up

to 0.2%) compared to the previous one and decreased by 0.23% percentage points overthe same period last year.

 Quater III: In the third quarter, the complicated growth of the fourth Covid-19 pandemic

in many parts of the country, especially in key economic provinces and cities, has madethe labor situation worse The number of people with jobs decreased sharply compared tothe previous quarter, and the unemployment rate reached a peak

The number of unemployed people working a people the third quarter of 2021 was more than 1.7 million people, an increase of 532.2 thousand people compared to the previous quarter and an increase of 449.6 thousand people compared to the same period last year The unemployment rate of working age in the third quarter

of 2021 was 3.98%(up to 1.36%) compared to the previous one and increased by 1,25% percentage points over the same period last year.

 Quarter IV: The number of unemployed people of working age in the fourth

quarter of 2021 was more than 1.6 million people, a decline of 113.1 thousand people compared to the previoquarterter and an increase of 369.2 thousand people compared to the same period last year The unemployment rate of working age in the third quarter of 2021 was 3.56%(down to 0.42%) compared to the previous one and increased by 0.93% percentage points over the same period last year With the policy of flexible adaptation in epidemic prevention to restore the economy, the lả market in the fourth quarter began to recover Labor force, the number of employed people in the fourth quarter increased compared to the previous quarter while the unemployment rate decreased.

However, in general, for the whole year of 2021, the complicated and prolonged impact of Covid 19, the pandemic has taken a role on the employment in 2021 more than in 2020.

3 Balance of Trade

 VietNam’s trade balance in 2020

The trade balance is the value of exported goods less the value of imported goods A positive value represents a trade surplus, whereas a negative value represents a trade deficit In 2020, Vietnam's trade surplus is expected to be around 19.97 billion US dollars (2022, Aaron O'Neill)

Despite facing numerous difficulties and challenges as a result of the Covid-19 epidemic,Vietnam set a new record in terms of export-import turnover in 2020 The total import-export value of the country as a whole reached 545.36 billion USD, up 5.4 percent from

2019 In which case, the value of exported goods increased by 7.0 percent to 282.65billion USD increased by 18.39 billion USD, while imports reached 262.70 billion USD,

up 3.7 percent, respectively by 9.31 billion USD The country's merchandise trade

balance reached a surplus of 19.95 billion USD at the end of 2020, the highest level in 5consecutive trade surpluses since 2016 (Trần Duẩn, 2022)

Impressive import-export turnover has propelled Vietnam to the 22nd position in theworld in terms of turnover and export capacity, and the 26th position in terms ofinternational trade, marking a watershed moment for the industry Shortly, exports willoutnumber imports Vietnam, in particular, has many export products ranked fifth in theworld, including rice, cashew nuts, coffee, textiles, footwear, and seafood (Trần Duẩn,2022)

The export goods structure continued to improve, with the crude export contentdecreasing and the export of processed and industrial products increasing The proportion

of processed industrial products in total export turnover increased from 78.9 percent in

2015 to around 85 percent today (in 2020) Meanwhile, the proportion of fuel and mineralproducts has fallen from 3% in 2015 to less than 2% (in 2020) In difficult times,Vietnam has 31 export items worth more than USD 1 billion, with 9 products worth morethan $5 billion and 6 worth more than $10 billion (Trần Duẩn, 2022)

The fact that the Vietnamese government has signed new free trade agreements (FTAs)such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, theEU-Vietnam Free Trade Agreement, and the Economic Partnership AgreementComprehensive Regional has created favorable conditions for Viet Nam In 2020,Vietnam had a trade surplus primarily with developed-country markets with strict qualityrequirements for imported goods, such as the United States (nearly 62.7 billion USD), the

EU (nearly 20.3 billion USD), and the EU (nearly 20.3 billion USD) (nearly 20.3 billionUSD) Meanwhile, imports from the United States totaled 13.7 billion USD, a 4.9 percentdecrease from the same period in 2019 Vietnam's exports and imports of goods to theAsian market continued to be significant The highest is approximately 64.5 percent ofthe total export-import value Vietnam's import-export turnover to China, ASEAN, Japan,and South Korea, respectively, is USD 132.4 billion, USD 53.1 billion, USD 39.7 billion,and USD 65 billion (Trần Duẩn, 2022)

 VietNam’s trade balance in 2021

The results achieved in the second half of December 2021 brought the total import-exportvalue of the whole country in 2021 to USD 668.55 billion, up 22.6% (equivalent to anincrease of USD 123.23 billion) over the previous year 2020 (Hoàng Lan, 2022)

In which, the total import-export value of foreign direct investment (FDI) enterprisesreached US$463.43 billion, up 24.6% (equivalent to $91.55 billion); the import-exportvalue of domestic enterprises was 205.12 billion USD, up 18.3% (equivalent to 31.67billion USD) over the previous year (Hoàng Lan, 2022)

In the 2nd period of December 2021, the trade balance of goods had a surplus of USD 2.6billion In general, in 2021, the trade balance will have a surplus of 4.08 billion USD.(Hoàng Lan, 2022)

Specifically, in terms of exports: The total value of Vietnam's export goods in the 2ndperiod of December 2021 reached 18.68 billion USD, up 18.4% (equivalent to a 2.9