ABSTRACT
The COVID-19 pandemic has harmed Viet Nam’s economy, resulting the lowest gross domestic product (GDP) growth rate in 2020 in the last three decades. The impacts vary significantly across and within sectors, with tourism and transport as well as manufacturing activities being the most affected. Many businesses and people have been exposed to the harsh realities of the pandemic. However, Viet Nam has remained one of the most dynamic economies in the world. Several factors explain this economic resilience. First, the foreign market was the driving force as merchandise exports continued to grow at an exceptional rate. Second, domestic activities rebounded when the authorities started to ease most mobility restrictions. Third, the government has been quick to use monetary and fiscal tools to help the most vulnerable businesses and people, including tax relief and direct financial support, which have been relatively well implemented. At the same time, public investment has been promoted. However, supporting policies have not been as successful as expected. Many people working in the informal sector did not receive help when they needed it. Micro and small businesses have difficulties obtaining government support because of lack of information, complicated application procedures, and long waiting times. Although the prospects for an economic recovery are good, especially over the medium to long term, the government needs to take a leading role in assisting the most affected sectors through a combination of targeted tax and financial measures as well as assistance to the most vulnerable firms and employees.
