Vietnam’s second-quarter GDP growth collapses amid COVID-19

A man paints steel structures of a new factory in Hanoi, Vietnam

Vietnam’s economic growth fell to its slowest pace in at least 30 years in the second quarter due to the impact of the coronavirus pandemic, putting the government’s 2020 economic targets well out of reach.

Gross domestic product in the April-June period grew 0.36% from a year earlier, compared with an expansion of 6.73% in the same period last year, the General Statistics Office said in a statement on Monday.

“The complicated development of the COVID-19 pandemic has left a negative impact on all socio-economic aspects,” the GSO said.

The latest growth rate was the lowest since quarterly records began in Vietnam 30 years ago, a senior GSO official confirmed.

The official said the anaemic growth meant the economy would need to expand 10% in the second half of the year to achieve the government’s official 2020 target of 6.8%, which was set before the pandemic.

The services sector in the second quarter contracted 1.76% from a year earlier, while the industrial sector rose 1.38% and the agriculture sector was up 1.72%, the GSO said.

The Southeast Asian country is seeking to resume economic activity after recording only 355 COVID-19 cases and no deaths due to the virus. Vietnam has not seen any community infections for more than two months.

The International Monetary Fund forecast last month Vietnam’s economic growth will slow to 2.7% in 2020, but Prime Minster Nguyen Xuan Phuc said his government will try to keep growth above 5%.

According to the GSO, Vietnam’s exports in the first half of this year fell 1.1% from a year earlier to $121.21 billion, while imports were down 3.0% to $117.17 billion, resulting in a trade surplus of $4.04 billion.

The country’s consumer prices in June rose 3.17% from a year earlier, it said. Average consumer prices in the January-June period rose 4.19%.

Vietnam’s industrial output in June rose 7.0% from a year earlier, the GSO added.

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