Foreigners wear face masks while visiting Hỏa Lò Prison Museum in Hà Nội. Tourism is one of the sectors being affected by the coronavirus outbreak in China. VNA/VNS Photo Thanh Tùng

In the first scenario, if the epidemic is controlled promptly in the first quarter of this year, Việt Nam’s GDP growth rate is estimated at 6.27 per cent, 0.53 percentage points lower than the target set by the Government in its Resolution No.1.

In the second scenario, if the epidemic is controlled in the second quarter, the estimated GDP will only increase 6.09 per cent over the previous year, 0.71 percentage points lower than the target.

MPI said that the epidemic might last until the first quarter or even into the second quarter of 2020. “This makes it difficult to accomplish the objectives and targets of socio-economic development in 2020 assigned by the National Assembly, especially the targets of economic growth, trade, import and export in each quarter and the whole year.”

"To achieve the 2020 GDP growth rate of 6.8 per cent as set out in Resolution No.1, it is a huge challenge," said Minister of Planning and Investment Nguyễn Chí Dũng.

The ministry said the epidemic would also greatly affect the target of controlling inflation below 4 per cent this year. If the epidemic continues into the second quarter, in addition to the impact of petrol price adjustments, natural disasters, adverse weather and increasing pork price, the average Consumer Price Index this year could rise 4.86 per cent from last year.

According to the IMF, it is still quite early to assess the impact of the coronavirus outbreak on the global economy this year, but it is certain that growth in the first quarter will be seriously reduced. In 2003, the SARS pandemic caused about US$40 billion in losses when the Chinese economy accounted for only 4 per cent of global GDP. However, China now contributes 18 per cent of global GDP, so the coronavirus pandemic could have effects of three to four times greater.

The effects are already evident in some manufacturing industries and service sectors, such as tourism and hospitality, when the global value chain is disrupted. China is currently the largest market for new cars and semiconductors, the largest country for international tourism, the leading exporter of apparel and textiles in the world, and also biggest producer of laptops and mobile phones in the world.

Minister of Industry and Trade Trần Tuấn Anh said in case the epidemic was controlled in the short term (less than three months), it’s estimated that the Việt Nam's exports to China could decrease by between US$400million and $600 million, equal to 5-8 per cent, depending on the evolution of the epidemic.

Deputy Minister of Planning and Investment Trần Quốc Phương said at the Government’s January conference that the above figures are estimations. The reality depends on when the epidemic is controlled, as well as policies, impacts, and administration of the Government on the economy.

“We will regularly update information and review the scenarios to promptly report to the Government and the Prime Minister,” Phương said.

Regarding the implementation of the socio-economic development goals in 2020, former deputy director of the Central Institute for Economic Management Võ Trí Thành told baodautu.vn that it was necessary to make evaluations based on four factors, including the epidemic caused by coronavirus, the changes in the US-China trade war, new regulations related to the restriction of alcohol and the Vietnam-EU Free Trade Agreement (EVFTA).

He said of these four factors, except the EVFTA which can have positive effects on Việt Nam’s economy, the impact of the remaining three factors is unpredictable.

"The economy in 2020 will struggle," Thành said.

Speaking at the Government’s January meeting, Prime Minister Nguyễn Xuân Phúc said that the growth target will not be adjusted. It cannot be set back, but solutions are needed to ‘turn defeat into victory’, overcoming difficulties and bringing the economy forward.

“This is imposing heavy responsibilities on ministries, branches and localities in their efforts to realise the socio-economic development targets by 2020,” Phúc said.

Deputy Minister Phương said the MPI has proposed the Government two packages of solutions. The first package is focusing on measures to prevent and control the outbreak of coronavirus, while the second aims to recover production, ensuring supply and demand, stabilising goods prices, and implementing policies to stimulate production and promote economic growth.

Phương said the ministry also emphasised solutions to the disbursement of public investment.

“It is necessary to immediately resolve administrative procedures and other problems so that businesses can start construction and implement large-scale projects, creating a spill over effect on socio-economic development of localities and regions,” he added. — VNS