Stronger Headwinds Bring New Challenges for the Government

With rising global health and economic concerns, Vietnam economy is expected to be significantly affected, even though the COVID 19 health crisis has been so far contained, with only 240 cases of infected people and no registered death as of early...

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Main Author: Morisset, Jacques
Format: Policy Note
Language:English
Published: World Bank, Washington, DC 2020
Subjects:
Online Access:http://documents.worldbank.org/curated/en/698671589882858003/Stronger-Headwinds-Bring-New-Challenges-for-the-Government
http://hdl.handle.net/10986/33780
id okr-10986-33780
recordtype oai_dc
spelling okr-10986-337802021-05-25T09:38:33Z Stronger Headwinds Bring New Challenges for the Government Morisset, Jacques CORONAVIRUS COVID-19 PANDEMIC RESPONSE FISCAL POLICY MONETARY POLICY ACCESS TO FINANCE SOCIAL PROTECTION ECONOMIC SHOCK ECONOMIC RECESSION VULNERABLE POPULATION TAXATION EMPLOYEE RETENTION EMPLOYMENT INFORMAL SECTOR With rising global health and economic concerns, Vietnam economy is expected to be significantly affected, even though the COVID 19 health crisis has been so far contained, with only 240 cases of infected people and no registered death as of early April. The World Bank’s GDP growth forecast for Vietnam has been cut by half compared to pre-crisis projections, with new forecast at 3.0 percent in 2020. Both the fiscal and external accounts are expected to deteriorate, creating a fiscal financing gap of approximately 5 billion dollars that will require new borrowings. The Government’s fiscal response, a combination of tax and social protection measures, is expected to attenuate the short-term economic costs associated to the COVID 19 pandemic, but the key challenges will be the rapid and effective implementation of the above measures and preparing the economy for the expected rebound when the health crisis is contained. Easing monetary and credit policies creates a welcome buffer to the affected businesses, but close monitoring is required as banks become increasingly exposed to the economic slowdown, affecting their asset quality, liability, and profitability over time. Potential areas for collaboration between the Government and the World Bank could include (i) macro and fiscal monitoring; (ii) implementation of social protection measures; and (iii) reforms to be implemented for optimizing the rebound of the economy. 2020-05-20T20:00:13Z 2020-05-20T20:00:13Z 2020-04 Policy Note http://documents.worldbank.org/curated/en/698671589882858003/Stronger-Headwinds-Bring-New-Challenges-for-the-Government http://hdl.handle.net/10986/33780 English COVID-19 Policy Response Notes;No. 3 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Policy Note East Asia and Pacific Vietnam
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic CORONAVIRUS
COVID-19
PANDEMIC RESPONSE
FISCAL POLICY
MONETARY POLICY
ACCESS TO FINANCE
SOCIAL PROTECTION
ECONOMIC SHOCK
ECONOMIC RECESSION
VULNERABLE POPULATION
TAXATION
EMPLOYEE RETENTION
EMPLOYMENT
INFORMAL SECTOR
spellingShingle CORONAVIRUS
COVID-19
PANDEMIC RESPONSE
FISCAL POLICY
MONETARY POLICY
ACCESS TO FINANCE
SOCIAL PROTECTION
ECONOMIC SHOCK
ECONOMIC RECESSION
VULNERABLE POPULATION
TAXATION
EMPLOYEE RETENTION
EMPLOYMENT
INFORMAL SECTOR
Morisset, Jacques
Stronger Headwinds Bring New Challenges for the Government
geographic_facet East Asia and Pacific
Vietnam
relation COVID-19 Policy Response Notes;No. 3
description With rising global health and economic concerns, Vietnam economy is expected to be significantly affected, even though the COVID 19 health crisis has been so far contained, with only 240 cases of infected people and no registered death as of early April. The World Bank’s GDP growth forecast for Vietnam has been cut by half compared to pre-crisis projections, with new forecast at 3.0 percent in 2020. Both the fiscal and external accounts are expected to deteriorate, creating a fiscal financing gap of approximately 5 billion dollars that will require new borrowings. The Government’s fiscal response, a combination of tax and social protection measures, is expected to attenuate the short-term economic costs associated to the COVID 19 pandemic, but the key challenges will be the rapid and effective implementation of the above measures and preparing the economy for the expected rebound when the health crisis is contained. Easing monetary and credit policies creates a welcome buffer to the affected businesses, but close monitoring is required as banks become increasingly exposed to the economic slowdown, affecting their asset quality, liability, and profitability over time. Potential areas for collaboration between the Government and the World Bank could include (i) macro and fiscal monitoring; (ii) implementation of social protection measures; and (iii) reforms to be implemented for optimizing the rebound of the economy.
format Policy Note
author Morisset, Jacques
author_facet Morisset, Jacques
author_sort Morisset, Jacques
title Stronger Headwinds Bring New Challenges for the Government
title_short Stronger Headwinds Bring New Challenges for the Government
title_full Stronger Headwinds Bring New Challenges for the Government
title_fullStr Stronger Headwinds Bring New Challenges for the Government
title_full_unstemmed Stronger Headwinds Bring New Challenges for the Government
title_sort stronger headwinds bring new challenges for the government
publisher World Bank, Washington, DC
publishDate 2020
url http://documents.worldbank.org/curated/en/698671589882858003/Stronger-Headwinds-Bring-New-Challenges-for-the-Government
http://hdl.handle.net/10986/33780
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