Economic simulation 2023

A series of macroeconomic indicators of February and the first two months of the year, which the General Statistics Office has just announced, show that the challenges and difficulties of the economy in 2023 are becoming more and more obvious. The more I read, the more anxious I feel.

Worry is right, as industrial production, an important growth engine of the economy continues to struggle. Although the Index of Industrial Production (IIP) in February 2023 is estimated to increase by 5.1% compared to January 2023 and increase by 3.6% compared to the same period last year, if calculated in 2 months, decreased by 6.3% compared to the same period in 2022. The reason might not be that other than that the world economy continued to face many difficulties, unpredictable fluctuations, inflation of countries, although cooled down, was still high. , orders decreased, export turnover decreased.

Statistics on Vietnam’s goods trade show this even more clearly. In the first two months of the year, export turnover of goods was estimated at only 49.44 billion USD, down 10.4% over the same period last year. Meanwhile, import turnover of goods was estimated at 46.62 billion USD, down 16% over the same period last year.

Imports of goods fell more sharply, so the trade balance of goods had a surplus of 2.82 billion USD in the first 2 months of the year, while in the same period last year, there was a deficit of 0.3 billion USD and in some ways, This is a positive number. However, a sharp drop in imports might also be a sign of difficulties in production and exports in the coming months. The decrease in orders is the reason for the decrease in the amount of imported materials.

The foreign market has been like that, the domestic market is equally difficult, when the purchasing power of the economy has not improved much. Excluding the price factor, the total retail sales of goods and services in the first two months of 2023 still increased by 9.2% over the same period and this figure is very positive compared to the decrease of 1.1% of the previous year. The same period in 2022. Even the total retail sales of consumer goods and services in the first two months of 2023 still increased by 24.9% compared to the first two months of 2019 – the year before the Covid-19 epidemic.

But the General Statistics Office also admitted that the scale of the total retail sales of consumer goods and services in the first two months of 2023 only reached 77.7% of the scale of this indicator, if estimated in terms of conditions. Normally, there has been no Covid-19 epidemic from 2020 to now.

When the momentum of production declined, it is not difficult to understand why, the business sector continued to face difficulties. In the first two months of 2023, the whole country had only 37,900 enterprises registered for new establishment and returned to operation, down 11.2% over the same period last year. Meanwhile, the number of enterprises withdrawing from the market was 51,400 enterprises, up 14.5%, higher than the number of “newborns” and returning.

Looking at the average monthly number of 25,700 businesses withdrawing from the market, it can be seen that, with the economy still facing difficulties, the business sector cannot recover soon.

In fact, as 2023 begins, a lot of expectations are placed on the service sector. However, total retail sales have not improved much. Meanwhile, the tourism industry is still facing many challenges.

In two months, international visitors to Vietnam were estimated at over 1.8 million arrivals, 36.6 times higher than the same period last year, but still less than 60% compared to the same period in 2019 – the year without the Covid-19 epidemic. 19. When tourism really recovers strongly, to contribute to economic growth, is not an easy question to answer.

The story is that, while the economy is so tough, putting pressure on the economy’s goal of promoting growth, the pressure of high inflation is increasingly present. Although the Consumer Price Index (CPI) in February 2023 only increased by 0.45% compared to the previous month, it increased by 0.97% compared to December 2022 and increased by 4.31% over the same period last year. before. If calculating the average of 2 months, the increase is 4.6%. It is even worth noting that the core inflation of 2 months has increased to 5.08%, higher than the average CPI.

The Ministry of Planning and Investment was right when as early as January 2023, it warned that difficulties and challenges are increasing both from outside and inside the economy. Along with that, the pressure to manage economic growth, control inflation and ensure macroeconomic stability is increasing.

After 2 months, perhaps these warnings will continue to be set at a higher level, when difficulties and challenges become more obvious. This once more requires a new proactive, accurate, timely and appropriate management solution suitable to the new situation, and at the same time implements more drastic and effective implementation, to contribute to the resolution of difficulties. difficulties and challenges and take advantage of time and opportunities to continue recovering the economy.