Compared to the scenario without storm No. 3, GDP growth in the third quarter may decrease by 0.35 percentage points.
Storm No. 3 and its circulation have a massive area of influence, spanning 26 northern provinces and cities and Thanh Hoa (accounting for more than 41% of GDP and 40% of the country's population), combined with the discharge of floodwaters in the upper reaches of some large rivers, and prolonged heavy rains, causing serious flooding, flash floods, and landslides, in many areas.
Until now, some localities are still flooded or at high risk, causing even more severe damage.
Growth rate expected to slow
As a locality directly affected by storm No. 3, Quang Ninh Province suffered heavy damage, estimated at over 23.7 trillion VND. Regarding tourism, the most severely affected areas are Ha Long City and some coastal localities such as Van Don, Cam Pha, and Co To.
Restaurants using steel frames, corrugated iron roofs, and simple materials in Ha Long City have all collapsed or are severely damaged. Many establishments are unable to be repaired for business due to complete damage.
In Hai Phong City, storm No. 3 damaged more than 25,000 hectares of rice fields and more than 3,000 hectares of flowers and vegetables. More than 4,600 hectares of aquaculture were affected. More than 30,000 factories, enterprises, and industrial works, 1,200 agency headquarters and 213 markets and shopping malls were damaged.
The total damage caused by storm Yagi in Hai Phong until now (converted into money) is estimated at nearly 11 trillion VND.
According to the Ministry of Planning and Investment report, preliminary and incomplete estimates show that the property damage caused by storm No. 3 is about 40 trillion VND. In addition, many roads were flooded and damaged, causing traffic activities (especially roads and railways) to be partially suspended.
Farms, households growing rice, crops, livestock and aquaculture households in most areas affected by storm No. 3, including coastal areas, urban areas, urban borders, rural areas, and mountainous areas, are the most severely damaged, requiring numerous resources and time to re-herd, re-crop, and reproduce.
The storm and flood came when the North was in its planting season, not yet in the harvest season. Many tourist and accommodation facilities were damaged and had to close for repairs.
Therefore, the North will miss the international tourist season (from September 2024 to April 2025) and may be unable to attract domestic visitors, especially key tourist destinations such as Hanoi, Hai Phong, Quang Ninh, Lao Cai, and Ha Giang.
Industrial and construction enterprises were also affected by the storm, especially the indirect impact of power outages and communications, with labour and workers' families affected.
Therefore, the country and many localities’ growth rate forecast for the last six months of the year is expected to slow down. The country's GDP growth in the third quarter may decrease by 0.35% and in the fourth quarter by 0.22% compared to the scenario without storm No. 3.
The estimated GDP for the whole year may decrease by 0.15% compared to the scenario where the growth rate could reach 6.8% - 7%, in which the agriculture, forestry and fishery sector decreased by 0.33%, industry and construction decrease by 0.05% and services decrease by 0.22%.
The growth rate of GRDP (total product in the area) in 2024 of many localities such as Hai Phong, Quang Ninh, Thai Nguyen, and Lao Cai will decrease by more than 0.5%.
Research on zero-interest packages
After three years of being affected by the COVID-19 pandemic, Nguyen Quoc Dung, the owner of a seafood restaurant in Ha Long, said he has gradually recovered and returned to stable operations.
It may take a long time to restore normal operations after the shock from the storm. Because the restaurant was severely damaged, the entire exterior roof, tables, chairs, and equipment were affected by the storm and could not be used.
Meanwhile, building a business establishment in the middle of a tourist centre like Ha Long City requires significant money, and to operate normally as before will take several years.
According to Dr Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research, to restore production, the first thing that businesses and enterprises need is capital to rebuild factories and buy back damaged machinery and equipment.
However, asset quality and loan security were reduced after the storm, making it even more difficult to access suitable capital sources. Therefore, the State also needs to quickly announce tax exemption, reduction and deferral policies that have been very successful in the post-COVID-19 period to help businesses use resources quickly and reinvest and restore production and business.
Banks can also review the risk assessment of loans, reschedule debts and create mechanisms to support groups of subjects that have identified damages and continue to receive funding to implement feasible projects in restoring production and business.
In particular, it is necessary to review and evaluate the overall infrastructure system, including rural areas, industrial parks, and infrastructure connections between regions, to have timely and smooth response solutions and support for transportation and logistics for the area.
"Continue to promote the improvement of the business environment, create favourable conditions so that not only damaged enterprises but also undamaged enterprises are excited to invest in production and business activities and continue to produce to compensate for recent losses, aiming to ensure the growth target for the whole year of 2024", Viet emphasised.
At the Government Standing Committee Conference with localities affected by storm No. 3, Prime Minister Pham Minh Chinh requested to urgently restore production and business activities, control inflation well and strive for GDP growth of about 7% for the year.
The Prime Minister requested to review and count the damage to production and business establishments to restore cultivation, livestock, and service businesses. Especially credit policies, support for seedlings and fertilisers for agriculture, support for restoring services and industrial production, and avoiding disruption of supply and production chains. This includes plans to strengthen transportation, reduce freight rates, restore warehouses for goods gathering, and regulate hydroelectric and irrigation works in flood discharge and water storage.
The Prime Minister also requested the State Bank of Vietnam and the banking system to study policies on debt extension, deferral, and debt forgiveness, credit policies, zero-dong interest rate packages; the Ministry of Finance to study the reduction, deferral, and postponement of taxes, fees, and charges; the Ministry of Industry and Trade to ensure input materials and raw materials for production and business; the Bank for Social Policies to have plans for lending to households; The insurance industry promptly pays for damages to businesses and people.
The Prime Minister assigned the Ministry of Planning and Investment and relevant agencies to develop and implement a program to overcome the consequences of storms and floods, restore production and business, promote growth, and report to competent authorities for consideration and decision for implementation.
