News

Vietnam's economy in the coronavirus storm

As of 6am on February 6th, 2020, the National Health Commission of China confirmed the number of new coronavirus infections has exceeded 28,000, the number of deaths increased by 73, to 565 in total worldwide. The coronavirus storm is booming across the globe and affecting heavily in many areas, including the Vietnamese economy. According to the report of SSI Securities Company, in Vietnam, there are 9 industries that were negatively affected by coronavirus, 10 neutral and 4 industries were evaluated positively.

9 industries are heavily affected

SSI predicts that 9 industries will be affected by Coronavirus including textile, retail, seafood, beer, oil and gas, securities, seaport - transportation, airport services and aviation.

Currently, China is the market that provides the largest fabric material for Vietnam. Therefore, the production and business activities of Vietnamese textile enterprises will be negatively affected by the closure of many textile factories in China in January and February.

For the retail industry, the number of shoppers at stores will decrease as consumers are less likely to go to public places and switch to online shopping to avoid the possibility of Coronavirus infection.

All airlines may be negatively affected by the Coronavirus incident, as travel demand may decrease. Along with that, airport services related to cargo and passengers will be affected. Passengers from China accounted for about 40% of Vietnam's total passengers in 2019 and this number will plummet in the short term. Freight activities related to China will also be reduced due to lower demand from Chinese consumers and limited production.

10 sectors are not affected by the coronavirus storm

SSI assessed neutral on 10 industries including automobile, dairy, housing real estate, industrial park real estate, banking, insurance, construction, steel, cement and fertilizer.

The demand for commercial real estate is not affected by the Coronavirus because the purchase of condominiums is based on the long term needs and plans. Coronavirus also does not affect industrial property developers. The demand for industrial park land is expected to continue to increase thanks to strong investment in Vietnam and the relocation of production from China.

4 industries could benefit in the short term

SSI assessed that there are 4 industries that could benefit from the Coronavirus epidemic including pharmaceuticals, information technology, electricity and water.

In particular, businesses are allowed to import drugs (especially special drugs) and distribution companies, manufacturing medical supplies are the main businesses that benefit. The majority of domestic pharmaceutical enterprises mainly produce antibiotics, simple medicines and functional foods, which do not benefit from the outbreak of the epidemic.

According to Thanhnien.vn and Haiquanonline.com.vn

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