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Like what the world economy is facing, Việt Nam must tackle challenges on its path to recovery. The new COVID wave may pose downside risks to Vietnam’s economy. But positive figures in enterprise activities, foreign direct investment activities and some of the service activities as well as effort to keep inflation of government in Q2 2021, Vietnam still expected to be one of the main winners. 

Service activities  

Retail sales of consumer goods and services 

In Q2 2021, under the 4th wave of COVID-19, the retail market currently has not been significantly recovered. Gross retail sales of consumer goods and services in Q2 2021 was estimated at 1,177.6 trillion VND, down 8.4% compared to the previous quarter and up 5.1% over the same period last year.  

Limited vaccination rate throughout the country, along with strict pandemic prevention measures implemented in the big city as Ha Noi, Da Nang, Ho Chi Minh city, most notable being the suspension of street-side restaurants and cafes from the 3rd of May, has partly affected the retail market. According to statistics from Google, while the number of visitors going to shopping malls and retail spaces seemed to increase and showed great potentials to recover in Q1, in Q2, this number has decreased significantly, compared to the same period from last year. 

Overall, expansion, merger activities along with new project openings will improve the retail market for the coming period once the pandemic is contained. Factors expected to foster the recovery of the market include the development of omnichannel, support for tenants, and most importantly the pandemic containment measures of the government, with the determination to vaccinate 70-75% of the population by Q1 2022 brings the potential for the recovery of the retail market. However, it will take some time for the market to restore to its pre-pandemic level. 

Transport and telecommunications 

The outbreak of the COVID-19 pandemic in our country has seriously affected business activities and all aspects of social life, in which this is among the hardest-hit industries.  

Freight transport was maintained in efforts to achieve the “dual goal” of the Government but continued to face difficulties when many localities implemented social distancing in areas with outbreaks of the Covid-19 epidemic. 

In Q2 2021, passengers carried was estimated at 844.4 million persons, an increase of 24.3% over the same period last year. Generally, for the first 6 months of 2021, passenger carried reached 1,813.5 million passengers, decreased by 0.7% over the same period last year (the same period of 2020 down 26.8%) and passenger traffic gained 78.8 billion passengers-km, down 5,7% (the same period of 2020 decreased by 31.7%), of which domestic passengers’ carriage gained 1,813.4 million passengers, down 0.6% but overseas passengers’ carriage only achieved 94.9 thousand passengers, decreasing by 96.5%. 

Telecommunications revenue in Q2 2021 was estimated at 78.3 trillion VND, an increase of 4.2% compared to the same period last year (includes the price factor). Generally, in the first 6 months of 2021, compared to the same period last year, telecommunications revenue was estimated to reach 158 trillion VND, increased by 2.4%. In which, the total number of telephone subscribers was an increase of 0.3%, internet subscribers up 13.1%. This figure shows a booming market with huge opportunities for local and foreign investors, amid a competitive environment and a positive economic outlook. With already strong mobile phone penetration and emerging fixed broadband take-up in households, future growth is likely to remain solid. 

Tourism industry 

Vietnam has not opened up to international tourism to control the Covid-19 epidemic. At the same time, some localities have implemented social distancing, so domestic tourism is less exciting also. That is the main reason why the tourism industry is one of the most heavily affected in service actives. 

International visitors to Viet Nam in June were estimated at 7.2 thousand arrivals, went down 46.5% compared to the previous month but decreased by 18% compared to the same period last year. Generally, in the first 6 months of 2021, international visitors to Viet Nam were estimated at 88.2 thousand arrivals, which went down by 97.6% compared to the same period last year. 

Comparison with the same period last year, revenue from accommodation and catering services reached VND 224 trillion, down 2.7%. Travel revenue was estimated at 4.5 trillion dongs, down 51.8%. 

Vietnam tourism has made effort to realize the dual goal of drastically responding to the Covid-19 pandemic and reopening. The Ministry of Culture, Sports and Tourism (MoCST) is coordinating with related ministries and localities to build a pilot plan to reopen inbound tourism in Phu Quoc City (in Kien Giang Province) by applying COVID-19 Vaccination Certificate. As well, MoCST pay attention to digital transformation, focusing on developing tourism database systems; inter-connecting the tourist information system and smart applications. Communication, promotion on digital platforms has been enhanced also. These factors will be pushing the tourism industry to recovery in the second half of 2021. 

Enterprise activities 

The number of enterprises entering the market in the first 6 months of 2021 was 67,083 enterprises, an increase of 8.1% over the same period in 2020. This is the highest number of newly-established enterprises in the first 6 months of the year. The fields with a strong increase in new registration are real estate business, healthcare and social assistance activities, education and training, transportation and warehousing. The increase in the number of newly registered businesses has demonstrated the efforts and entrepreneurial spirit of the business community in the context of the epidemic.  

The registered capital of newly established enterprises is VND 942,648 billion (up 34.3% over the same period in 2020). This is also the highest level of newly registered capital ever in the first 6 months of the year, a positive signal, showing that production and business activities recovered quite strongly compared to the previous year. 

Besides, there were 26.1 thousand re-operated enterprises, an increase of 3.9% over the same period last year, bringing the total number of newly registered enterprises and re-operated enterprises in 6 months to 93,200 enterprises. In which, the highest increase was recorded in real estate business, the following by production and distribution, electricity, water.  

However, the epidemic is having a great impact on the production and business activities of many businesses, especially those operating in industries directly affected, such as trade, services, small or medium scale enterprises. 

FDI figures continue on an upward trajectory 

Q2 2021, Việt Nam named among world’s top 20 host economies for FDI

Realized investment capital in Q2 2021 at current prices was estimated at 661.1 trillion VND, up 7.8% over the same period last year. For the first 6 months of 2021, the total realized investment capital at current prices reached 1,169.7 trillion VND, up 7.2% over the same period last year. 

As of June 20, 2021, the total foreign investment capital in Vietnam including newly registered capital, adjusted registered capital and capital contribution and share purchase of foreign investors reached nearly 15.27 billion USD, down 2.6% over the same period last year. 

There were 1,855 times of capital contribution to buy shares from foreign investors with a total capital contribution of 1.60 billion USD, down 54.3%. In which, the processing and manufacturing industry reached 6.65 billion USD (72%); real estate business reached 1.28 billion USD (13.8%); production and distribution of electricity, gas, hot water, steam and air conditioning reached $691.1 million (7.5%) 

Among 55 countries and territories with newly licensed investment projects in Vietnam in the first 6 months of the year, Singapore is the largest investor with 4.74 billion USD (49.6%), followed by Japan (17.4%), Hong Kong (9%), China (7.1%), South Korea (6%) and the United States (3.1%). 

Vietnam’s investment abroad in the first 6 months of 2021 reached 547 million USD, up nearly 2.5 times over the same period last year. Focus on professional activities, science and technology (49.5%), wholesale and retail, repair of cars, motorcycles, motorbikes and motor vehicles (27.2%); agriculture, forestry and fishery (14.1%). In the first 6 months of the year, there were 15 countries and territories receiving investment from Vietnam, of which the United States was the leading country with USD 302.8 million (55.4%), followed by Cambodia, Canada, France, Germany and the Netherlands. 

Despite continue to face challenges due to the fourth Covid -19 wave, investors can see the positive in the second half of 2021. The Vietnamese government allowed maintaining production where possible by the “3 in one spot” policy. Besides, they remain keen on helping businesses and those affected by the pandemic through the policies delayed taxes, reduce land fee rentals and support policies for employers and employees as well as Covid vaccine priority for workers in industrial parks and export processing zones.  

The country’s success in containing the virus has strengthened foreign investors’ confidence. 

Consumer price index and inflation 

The price of input materials increased according to the world price; the increase in the price of electricity and water for a living in line with consumer demand were the main reasons for the consumer price index (CPI) in June 2021 increased by 0.19% compared to the previous month, went up by 1.62% compared to December 2020 and rose by 2.41% compared to June 2020.  

InQ2 2021, CPI increased by 0.45% compared to the previous quarter and by 2.67% over the same period in 2020. On average, in the first 6 months of 2021, CPI increased by 1.47% over the same period last year, the lowest increase since 2016. 

Core inflation in June 2021 increased by 0.07% over the previous month and by 1.14% over the same period last year. While average core inflation in the first 6 months of 2021 increased by 0.87% over the same period in 2020. 

Inflation pressure remains present and may even increase gradually until the end of the year. But the authorities will closely monitor the supply and demand movements, as well as the market prices of essential commodities. That means they will be proactive in the management of prices at the right time with the right dosage and remain effort to keep inflation pressure at bay. 


Despite facing many challenges and uncertainties on its path to recovery, Vietnam’s economic performance in Q2 2021 and the first six months of 2021 demonstrates that the economy remains resilient. Although the current crisis and pandemic are going on, Vietnam will continue to reap the benefits and can attain the growth rate of 6 per cent this year due to the drastic direction of the Government and the Prime Minister, the initiative and creative ways of localities, the support of the people and businesses in the implementation of the “dual goals”, creating the momentum for the continued recovery in the second haft of 2021, and more importantly, catching up with the strong recovery in the region in particular and the world in general. Việt Nam is still an attractive destination and the safest for foreign investors. 

Source: GSO-