Economic growth inflation

The Hanoitimes - Such growth rate would make the Vietnamese economy the highest growth in the Southeast Asia, with the GDP growth expected to bounce back to 6.1% in 2021. The Asian Development Bank (ADB) has revised up Vietnam’s economic growth forecast to 2.3% in 2020 from the previous estimate of 1.8% in September, citing the strength of accelerated public investment, revived domestic consumption, trade expansion, and rapid recovery in China as main reasons. Such growth rate would be the highest in Southeast Asia, and expected to bounce back to 6.1% in 2021, according to the bank’s report released today. The ADB also forecast Vietnam inflation would be 3.5% from 3.3% as floods in the center of the country may exert pressure on food prices. In Southeast Asia, economic growth remains under pressure as Covid-19 outbreaks and containment measures continue, particularly in Indonesia, Malaysia, and the Philippines. The subregion’s growth forecast for 2020 is revised down to -4.4% from -3.8% in September, while its outlook for 2021 is also downgraded, with Southeast Asia now expected to grow 5.2% next year compared to the 5.5% growth forecast in September, noted the ADB. Overall, economic activity in developing Asia is forecast to contract by 0.4% this year, before picking up to 6.8% in 2021 as the region moves toward recovery from the effects of the Covid-19 pandemic. The new growth forecast is an improvement from the -0.7% GDP growth forecast in September, while the outlook for 2021 remains unchanged. “The outlook for developing Asia is showing improvement. Growth projections have been upgraded for China and India, the region’s two largest economies,” said ADB Chief Economist Yasuyuki Sawada. “A prolonged pandemic remains the primary risk, but recent developments on the vaccine front are tempering this. Safe, effective, and timely vaccine delivery in developing economies will be critical to support the reopening of economies and …

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The Hanoitimes - This is seen as a positive sign for the economy amid the current serious Covid-19 situation that is having negative impacts on enterprises’ operation. The February number of enterprises temporarily leaving market declined by 80.1% against last month to nearly 3,600, while those waiting to complete the dissolution process also decreased by 53.5%. Production of electricity equipment at A Chau Industry Company in Quat Dong Expansion Industrial Park. Photo: Thanh Hai “These are positive signs for the economy amid the current serious Covid-19 situation that is having negative impacts on enterprises’ operation,” stated the General Statistics Office (GSO) in its monthly-report. While the number of new business formation last month declined by 20.3% against January to 8,038, for which the statistics agency attributed the decline to the week-long Tet holiday in February, the total number in the first two months rose by 4% year-on-year to 18.100 with registered capital of a combined VND334.8 trillion (US$14.53 billion), up 52.2%. Average registered capital per newborn enterprise was VND18.5 billion (US$803,000) during this period, up 46.4% year-on-year. The government-run office informed that 11,000 enterprises resumed operations in the period, a decline of 7.6% inter-annually, bringing the total number of newly-registered and reinstated enterprises in the two-month period to 29,200. Consumer spending rises 5.49% The long Tet holiday break and the Covid-19 outbreak in a number of cities/provinces in February led to a decline of 5.4% month-on-month on the total retail sales of consumer goods and services to VND439.7 trillion (US$19.07 billion). However, total consumer spending in the first two months remained positive with a growth rate of 5.49% year-on-year to VND904.5 trillion (US$39.24 billion). 8-year high cost of living The consumer price index (CPI), the main gauge of inflation expanded by 1.52% against the …

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The Hanoitimes - Vietnam is believed to have the most competitive commercial tax regimes and local supply chains to lure foreign investors. Vietnam has become a major alternative manufacturing destination for businesses that want to diversity supply chain amid uncertainties caused by the global health crisis. Vietnam is poised to be one of the biggest manufacturing hubs. Photo: AFP Savills Vietnam has pointed two critical factors for the growing trend in which local developers are planning more industrial parks to capture this increasing foreign investment and further ramp up appeal. The first factor is competitive commercial tax regimes. There are corporate income tax (CIT) incentives, fixed asset import duty exemptions, and exempted land rental fees. Notable incentives include zero profit tax for the first two years (usually 20%), followed by a 50% reduction for the next four years. The government provides even more preferential CIT incentives for strategically prioritized industries, such as those in Industry 4.0 and hi-tech manufacturing. Projects in special economic zones (SEZ) or in socio-economically challenged regions; and large scale projects that meet minimum requirements for investment capital, revenue, and headcount. Projects qualifying for any of the above will have a 10% CIT rate for 15 years, four years CIT exemption; and a -50% tax reduction for the next nine years. Vietnam is also one of the most cost-efficient markets for industrial building costs, according to Turner & Townsend’s 2019 Construction Costs Survey. In Ho Chi Minh City, the average construction cost of basic factory and warehousing is US$352/m2 while factory units and larger distribution centers cost US$412/m2; and hi-tech factories US$618/m2. Ms. Hoang Nguyet Minh, Associate Director of Investment of Savills Hanoi, said Vietnam is clearly benefiting. Developing fresh industrial real estate is a smart long term play, especially considering …

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