Vietnam Macroeconomic Report Q1 2021

Recently, on April 21, 2021, the Vietnam Institute for Economic and Policy Research (VEPR) under the VNU University of Economics and Business announced the Macroeconomic Report for the first quarter of 2021.

This report is part of the quarterly Macroeconomic Report Series produced by VEPR with the support of the Konrad-Adenauer Stiftung (KAS).

The report covers the following main topics:
  • The global economy has shown signs of recovery with confidence coming from the Covid-19 vaccine, but still contains many uncertainties and lack of uniformity across countries and economic sectors.
  • Oil prices surged in the first quarter of 2021 thanks to OPEC+'s efforts to cut output and the bright outlook of the global economy. However, the upward momentum is likely to be reversed in the next quarter due to the unstable epidemic situation in Europe and OPEC+'s decision to raise oil production during May-July.
  • China's economy has recovered to pre-pandemic levels. In 2021, the Chinese government advocates continuing to maintain a flexible monetary policy and fiscal stimulus packages.
  • Along with effective supportive policies and strong promotion of vaccination against Covid-19 epidemic, the US economy in 2021 is expected to recover faster than the October forecast.
  • The economic recovery of the EU region, especially the countries that depend on tourism, will continue to face many difficulties in 2021 due to the outbreak of the disease again due to the appearance of a new variant of SARS- Covid-2, plus the slow progress of vaccination.
  • Vietnam's economy in the first quarter of 2021 kept a growth rate of 4.48% (yoy), equal to the growth rate of the fourth quarter of 2020 and higher than the growth rate of the same period in 2020 (3.82% (yoy)).
  • In the first quarter of 2021, the whole country had 29.3 thousand newly registered enterprises with a total registered capital of 447.8 trillion dong and a total number of registered employees of 245.6 thousand employees, down 1 .4% in the number of enterprises, up 27.5% in registered capital and 0.8% in the number of employees over the same period in 2020.
  • Average CPI in the first quarter of 2021 increased by 0.29% (yoy), the lowest increase in the past 20 years. Inflation (yoy) is expected to increase rapidly starting from April 2021.
  • The central rate tended to increase slightly throughout Q1/2021, ending the quarter at 23,244 VND/USD. The exchange rate at commercial banks decreased in January and increased slightly since February, ending at 23,170 VND/USD.
  • The domestic gold price is constantly at a high difference compared to the world gold price because the supply becomes scarce after the government tightens border management to prevent the Covid-19 epidemic, while the local people’s need of holding gold is still increasing.
  • It is forecasted that Vietnam's economic growth in 2021 can reach 6.0-6.3%.

Monetary policy should pay attention to the balance between supporting economic growth and macro stability, because in 2021 there may be inflation risks.

The report was published on April 20, 2021. The economic and market data in the report was updated to April 15, 2021. We are pleased to introduce to you!

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Nhat Linh (Tran.)

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