EFFECT OF CORONA VIRUS ON THE ECONOMY IN VIETNAM AND FISCAL AND MONETARY POLICY

bài tìm hiểu bằng tiếng anh về tác động cảu COVID 19 lên Kinh tế Việt Nam và các đề xuất các chính sách tài khóa để cải thiện tình hình kinh tế EFFECT OF CORONA VIRUS ON THE ECONOMY IN VIETNAM AND FISCAL AND MONETARY POLICY I. Covid19 status report. 1. Covid19 Global situation. Worldwide: confirmed cases 6.393.956; active cases 3.224.023, deaths 383.318, in 215 country. (As of 9h 1 june 2020) United States with the highest number of confirmed COVID19 infections. Map of the COVID19 outbreak as of 2 June 2020 1,000,000+ Confirmed cases 100,000–999,999 Confirmed cases 10,000–99,999 Confirmed cases 1,000–9,999 Confirmed cases 100–999 Confirmed cases 1–99 Confirmed cases No confirmed cases, no population, or no data available COVID19 Outbreak World Map Total Deaths per Capita 100+ deaths per million inhabitants 10–100 deaths per million inhabitants 1–10 deaths per million inhabitants 0.1–1 deaths per million inhabitants

EFFECT OF CORONA VIRUS ON THE ECONOMY IN VIETNAM AND FISCAL AND MONETARY POLICY

I Covid-19 status report.

1 Covid-19 Global situation

Worldwide: confirmed cases 6.393.956; active cases 3.224.023, deaths 383.318, in 215 country (As of 9h 1 june 2020)

United States with the highest number of confirmed COVID-19 infections

Map of the COVID-19 outbreak as of 2 June 2020

1,000,000+ Confirmed cases

100,000–999,999 Confirmed cases

10,000–99,999 Confirmed cases

1,000–9,999 Confirmed cases

100–999 Confirmed cases

1–99 Confirmed cases

No confirmed cases, no population, or no data available

COVID-19 Outbreak World Map Total Deaths per Capita 100+ deaths per million inhabitants

10–100 deaths per million inhabitants

1–10 deaths per million inhabitants

0.1–1 deaths per million inhabitants

0.01–0.1 deaths per million inhabitants

No deaths or no data

2 In Vietnam:

As of 4 June 2020, the country had 328 confirmed cases, 302 recoveries, and no deaths

Map of the COVID-19 pandemic in Vietnam as

of 15 May 2020

Confirmed 1–9 Confirmed 10-99 Confirmed 100-499

 How Covid affects Vietnam?

Like most of the world's economy, Vietnam was hit hard by the outbreak because of the slowdown of private and national industries, the downturn of stock exchanges, and the lower number of incoming tourists However, Vietnam

is expected to be harmed less than China

After the Vietnamese government ordered a nationwide isolation, many public areas such as schools and restaurants had to be closed until 15 April 2020

* Economics

- They also estimated that airlines will lose more than US$1 billion of revenue

- Vietnam Industry Agency says industry manufacturing processing is in short supply of raw materials and components (mostly imported from Japan, China, South Korea) leads to the risk of stopping many factory operation

- Tourism industry is the most severe affected, Civil Aviation Authority of Vietnam said the aviation industry is in the worst situation in 60 years of development

Foreign arrivals to Vietnam fell by 48.8% to 3.7 million in the reviewed period, the Vietnam General Statistics Office said

Of the total, 72.9% tourists were from Asia, down 51.4% The fall was seen in almost all major markets, such as China, Malaysia, South

Korea, Japan and France Tourism revenue was estimated at VND 8.3 trillion (US$ 360 million), down 54.1%

- Department of Housing and Real Estate Market Management of Ministry of Construction said the price of apartments increased over the same period last year (Hanoi increased 1.02%, Ho Chi Minh City increased 3.5%), the price of individual houses increased (Hanoi increased 3.82% , Ho Chi Minh City increased by 8.36%); while business premises rents decreased by 10-30%, real estate businesses reduced staffing by 50% compared to the time before the pandemic, 80% of real estate floors nationwide stopped operating [305] Owners

of rental business premises actively reduced 30% -40% of the price compared to the same period last year

Stores across Vietnam quickly sold out of surgical masks and hand sanitisers after the initial cases of coronavirus were reported

Interim Health Minister Vũ Đức Đam urged the public to remain calm during the outbreak and avoid excessive emergency shopping Vietnamese authorities also arrested people profiteering from the outbreak

- The Planning and Investment Ministry has estimated that 250,000 workers will lose their jobs on first quarter and another 1.5-2 million face a similar threat in the coming months The ministry has also warned that if the pandemic situation worsens, 400,000 would lose their jobs and three million more could be laid off

- As of May 21, agriculture increased by 0.08% and industrial production increased by 1.8% over the same period, the number of newly established enterprises decreased by 13.3% while the number of enterprises stopped doing business for a definite period increase by 33.6%

=> Economic growth is considered to be the worst since Doi Moi in 1986

- The Ministry of Planning and Investment published the survey results in April, which showed that 86% of nearly 130,000 enterprises were negatively affected due to Disease

- Ministry of Industry and Trade reported exports of US $ 8.22 billion in the first two weeks of May, considered to be the lowest turnover period since the beginning of 2020 to the present, the main export group (phones) , machinery and equipment) plummeted

(The Vietnam General Statistics Office said export turnover reached US$99.36 billion, down 1.7% year-on-year Meanwhile, import value reached US$97.48 billion, down 3%, Vietnam's exports to the EU and ASEAN fell 12% and 13.4%.)

* Sport and Sports TV

2020 V.League 1 to be delayed to 7 March until further announcement, which affected the preparation of Vietnam national football team for the upcoming 2022 World Cup qualification

It also caused the Vietnamese Grand Prix of the 2020 Formula One World Championship to be postponed until further notice

* Education

Schools and government authorities extended the holiday season until February

10 on a case-by-case basis On February 14, the Ministry of Health proposed schools to remain closed until the end of February, at which point schools had already closed nationwide

The decision to close schools nationwide, as a formality, came with the national isolation order on March 31, effective April 1

Vietnamese students have not gone to school this spring semester, but schools are gradually adopting online teaching On 31 March, the Ministry of Education and Training issued a guide of teaching plans for the second semester of the academic year 2019-2020 for junior high school and high school levels

* In popular culture

Vietnam's National Institute of Occupational and Environmental Health commissioned artists to release the song "Ghen Cô Vy" ("Jealous Coronavirus"), a remake of the 2017 song "Ghen" ("Jealous"), to teach people how to thoroughly wash their hands during the worldwide coronavirus outbreak

It has gone viral amidst the coronavirus outbreak, first earning praise from John Oliver in his talk show Last Week Tonight with John Oliver and has become increasingly popular among public and frequently duplicated by netizens, with UNICEF recommending the video as a means of fighting back the fear of coronavirus

II FISCAL POLICY OF VIETNAM

The Minister of Finance Dinh Tien Dung said that in the context of translating Covid-19 caused many difficulties in production and business activities, affecting the tax payment obligations of residents, enterprises, the last time, the Ministry of Finance has implemented many supporting solutions such as: tax renewal, exemption from a variety of fees, fees, as well as many solutions to balance the state budget In particular, the Ministry of Finance has submitted the government Decree No 41/2020/ND-CP on the renewal of tax payment and land rent for subjects influenced by the Covid-19 epidemic Accordingly, implementation of the 5-month tax payment deadline for value added tax and corporate income tax of enterprises, production and business organizations; Renew for 5 months for value added tax and personal income tax of the business households; Renew 5 months for land rents of enterprises, organizations and individuals It is known that, by estimate, when implementing this decree, about 740 thousand enterprises, up to 98% of the active business will benefit from the policy

According to economic experts, Decree No 41/2020/ND-CP (BH dated 8/4) was promptly issued an important, practical solution to help businesses, organizations and individuals overcome difficulties before the adverse impact of the Covid-19 epidemic In addition, the scope of supporting objects has an impact covering, dealing with the issue of relation between different departments in the economy This is precisely the key point of a fiscal policy that is used in sync to achieve multi-objectives such as supporting organizations and individuals, especially the business community in this particularly difficult period, ensuring the economic stability and national politics

In addition, the Ministry of Finance has also presented the government and settled under the exemption of import duties on medical equipment items served

to the prevention of the epidemic; The Government revised Decree No 122/2016/ND-CP and Decree No 125/2017/ND-CP and Decree No 134/2016/ ND-CP on the import tax to disassemble difficulties for enterprises operating footwear field, textile and processing of agricultural and forestry products, engineering, agriculture, auxiliary industry and automobile industry

At the same time, the Ministry of Finance has presented the Government to propose to the National Assembly at the coming meeting of the decision on the implementation level of enterprise income tax policy for small and medium enterprises, applied from 1/7/2020 If this policy is adopted, about 700 thousand enterprises, accounting for about 93% of the total number of active countries will benefit Thereby, the obligation to file the 2020 budget by the number of enterprises decreased about 7.8 trillion The Ministry of Finance also presented the Government to the National Assembly to raise the price reduction of personal income tax If this policy is adopted, the total number of workers ' incomes is retained for further increase for spending due to this adjustment in the year 2020 is about 10.3 trillion

Last time, the Ministry of Finance has collaborated with the industry to scrutinize cuts, waiver of various fees and fees Specific: free of charge for cooperatives, cooperative associations operating in the field of agriculture and enterprise, household, personal establishment new in the first year; 70% reduction in corporate registration fee rate; 67% reduction in corporate disclosure fee; 50-70% discount on revised grant fee, supplementary postal license The total fees and cuts that the business and people benefit from are about VND 500 billion Ministry of Finance has also issued circular adjustments from 10-50% for 9 service groups and exemp-fully exempt from the price of 6 service groups in the securities sector, applied in stock exchanges and Vietnam Securities depository This policy has a very good impact on the Vietnam securities market

According to the analysis of economic experts, the fiscal policy has been solved the urgent issues before the eyes, both solving problems for the long term, creating favorable conditions for the environment of business investment, production development

Therefore, the Ministry of Finance has counsels with the government and the grants authorities the policy to be issued right before the eyes as well as policies

on long-term to disassemble difficulties for people and businesses, development

of production and business is a timely effort, efficiency is remarkable To date, these policies have received the agreement, highly appreciated by experts, the business community and people

Fiscal Policy team – "Lifebuoy" for the post-19 business community

 Renewal of term of tax payment, land lease

 Small and super Small business income tax reduction

 Exemption from use of agricultural land

 Increase the deduction of individual income tax reductions thereby reducing tax obligations to the residents

III MONETARY POLICY OF VIETNAM

In early March 2020, the support package was worth over 280.000 billion dong (255.000 billion dong with bank credit support and 30.000 billion dong of tax support.)

 The cause must have support package:

 Fistly, Due to the Covid-19 translation influence, the supply chain was broken in Chinese link while there were no fewer sectors of manufacturing business in Vietnam depending on 70-80% of material sources from China This is a late mineral-money shock

 Second, due to the influence of the Covid-19 epidemic, the tourism market is not brake, moreover, the most heavily influenced countries of translation are the top tourist markets in Vietnam The tourism industry is most heavily influenced and has a wide range of related fields such as passenger transport, out-of-family dining, entertainment,

 Thirdly, the following shock bow is a bridge shock when Vietnam's export market is narrowed and most FDI enterprises are in the global value chain which is severely disrupted

 Fourth, due to Covid-19, the consumer belief in a double drop with temporary unemployment and reduced income should the domestic consumption market shrank

 Therefore, support packages are necessary but must be the right audience and based on market principles

Group Policy priority when the epidemic is controlled it is:

(i) promptly remove the restriction on the supply

(ii) support capital recovered by the business

(iii) stimulus to create motivation for the extended aggregate supply.

At the same time, each step restores the fiscal discipline (which is loosened during the epidemic) to ensure the sustainability of the budget over the long term

Monetary policy can assist through the State Bank (NHNN) to support commercial banks to restructure existing debts to the clients (reducing interest rates on current debts, debt reversal ); Discount in non-business period without revenue Depending on financial health, each bank will have a different loan discount of 0.5%-3% per year or no penalty calculation for deferred loans

When the epidemic is under control, monetary policy must play a decisive role

in providing the necessary capital to help the business recover from the production The point of note is that the activity of credit institutions depends

on the line of capital lending out and the capital return of the business In the period of the epidemic, businesses will have difficulties to maintain the flow of capital returned to credit institutions in the short term Even if the epidemic is under control, businesses also need time to recover their ability to repay

During this period, some credit institutions may be deficient in liquidity due to a flow of capital returned to congestion The State bank should be willing to provide timely liquidity to credit institutions When the production-business activities are restored to normal the State Bank will withdraw these funds to control inflation does not rise too high The funds will aim to "lubricate" to help the gears in the economy-the company operates Although banks ' profits may

be reduced, they also retain liquidity

 For example: Vietnam Airlines, since outbreak, air freight demand is significantly reduced This business has been reduced by 1% interest rate from the beginning of February

In essence, the credit package of 250,000 billion will be the synthesis of the current balance of commercial banks (NHTM) which will support the affected enterprises in the form of restructuring the loan term, reducing interest and fees 250,000 billion this is not a new money to be pumped into the economy in the form of new loans or new credits It is not an economic stimulus package nor is the form of monetary expansion