Vietnam Economy Showing Rapid Recovery Trend

Effectiveness of COVID-19 Response Measures Demonstrated

May Industrial Production Index Rises 11.2%

World Bank: "Economic Recovery Speeding Up"

Prime Minister Nguyen Urges "Achievement of This Year's Goals"

[Asia Economy Hanoi Joara, Guest Reporter] Since the economic reopening, Vietnam's manufacturing indicators have shown signs of recovery. Expectations are growing that the economic activity contraction caused by the novel coronavirus infection (COVID-19) will be resolved.

According to Vietnam News on the 9th, citing figures from the General Statistics Office, Vietnam's Industrial Production Index (IIP) for May rose 11.2% compared to the previous month. The Statistics Office analyzed that the rise in the IIP indicates that economic development has entered a recovery phase and that COVID-19 response measures have been effective. Additionally, retail sales increased by 26.9% from the previous month, and public investment rose by 17.5%. Foreign Direct Investment (FDI) attraction also showed steady improvement.

This positive trend is also reflected in industrial outlooks. The Purchasing Managers' Index (PMI) released by Japan's Nikkei and the UK market research firm IHS Markit jumped from 32.7 in April to 42.7 last month, marking the largest increase in Southeast Asia. The PMI is based on 50; a figure below 50 indicates a pessimistic outlook, while above 50 suggests a positive outlook. Although last month's figure still remained below 50, it can be interpreted as reflecting growing hope compared to the previous month.

The World Bank (WB) also announced that Vietnam's economy is rapidly recovering from COVID-19. According to the WB, Vietnam's product exports increased by 5% compared to April. However, they decreased by 5.5% compared to the same period last year. Due to disruptions in the global supply chain, import prices in May fell by nearly 6%. The WB evaluated that Vietnam's economy was able to accelerate its recovery by successfully controlling the global COVID-19 pandemic. It added that Vietnam is becoming the final destination for foreign capital flows.

Vietnamese Prime Minister Nguyen Xuan Phuc recently praised at a cabinet meeting that "Vietnam's economy has been recovering quickly and strongly since May." Prime Minister Nguyen urged, "Make efforts to achieve the 2020 economic goals," and instructed, "Support over 20 million poor and unemployed people through monetary, credit, and fiscal policy packages, especially including social security support."

Since COVID-19, Vietnam's image on the international stage has gradually improved. Vietnam ranked 12th in financial and health aspects among 66 emerging economies in the Economist magazine published last month.