Why Vietnam?

Vietnam's GDP is predicted to grow around 4.8% in 2021, although the economy has recorded solid results in the first half of the year. This forecasts that two percentage points are lower than the forecast released by the World Bank Group in December 2020. This takes into account the negative impact of the current COVID-19 outbreak on economic activities.

"Whether Vietnam’s economy will rebound in the second half of 2021 will depend on the control of the current COVID-19 outbreak, the effective vaccine rollout, and the efficiency of the fiscal measures to support affected business and households, and to stimulate the recovery," said Rahul Kitchlu, World Bank Country Director for Vietnam.

The transition from a centrally planned economy to a market economy has transformed Vietnam from one of the world's poorest countries into a low-middle-income country. Vietnam is currently one of the most dynamic countries in East Asia and the Pacific.

Due to extensive economic integration, Vietnam's economy was heavily affected by the COVID-19 pandemic and showed considerable resilience. GDP growth was estimated at 2.9% in 2020. Vietnam is one of the few countries globally with positive economic growth, but the pandemic has left long-term impacts on households - the income of about 45% of surveyed households decreased in January 2021 compared to January 2020. The economy is forecast to grow by 6.6% in 2021 if Vietnam controls the spread of the virus. At the same time, export-oriented manufacturing industries performed well, and domestic demand recovered strongly.

In the rest of 2021, with the average growth rate of the first six months at 1.47%, it is feasible to control the average CPI for the whole year at about 4%. However, there are still many potential risks to inflation coming from the world situation or due to the tendency to speculate and hoard domestic goods at some point in time. Therefore, the management agencies need to participate more actively, contributing to the implementation of the Government's dual goals.

The year 2021 is still very unpredictable due to the unusual movements of the world market, especially the COVID-19 pandemic, which negatively affects the domestic economy and banking system. Therefore, price management should continue to operate cautiously, flexibly, and proactively. Fiscal policy should be closely coordinated with monetary policy and other macroeconomic policies. This activity is to control inflation according to the set target. It also supports and removes difficulties for production, business, and people's lives affected by the COVID-19 pandemic.

In the first quarter of 2021, the Vietnamese labor market has suffered from destructive impacts due to the 4th outbreak of the Covid-19 Pandemic. The labor and employment survey results in the first quarter of 2021 recorded the number of participants in labor market decreased compared to the previous quarter and the same period last year. In the first quarter of 2021, the country had 9.1 million workers aged 15 and over affected by the Covid 19 epidemic. The proportion of informal and underemployed workers both increased compared to the previous quarter and the same period last year. The most notable bright spot in the first quarter of the labor market was the increase in income of employees compared to the previous quarter and the same period last year.

However, recent years have shown that the Vietnamese labor market has made specific improvements in labor and employment policies, creating a legal framework to develop the labor market, improving quality, the competitiveness of human resources, and creating jobs for workers. As a result, in the past period, the labor market has had many positive changes. The awareness of employees about social insurance (SI) and unemployment insurance (UI) has improved markedly, the rate of workers participating in voluntary social insurance and unemployment insurance has increased much compared to before. Labor has moved - From agriculture to industry and services.

• From the informal sector to the formal sector.
• From unstable jobs (self-employed, unpaid family labor) to more stable, sustainable, and secure jobs.
• From simple professions to professions that require expertise and high technology
• From areas with low labor productivity to areas with higher labor productivity.