Macro Update - Economic data weakens further due to continuing tight restrictions

COVID-19 cases continued to soar. In the first week of September, the average number of daily COVID-19 cases soared to nearly 13,000 from 8,000 daily cases a month ago. As of September 8, the total number of COVID-19 cases in Vietnam surpassed 560,000 — with half of the total reported in HCMC.

HCMC made tremendous progress in its vaccine rollout. As of September 8, around 24.5 million doses of COVID-19 vaccines were administered throughout Vietnam. Of the total, nearly 20.5 million people have received at least one dose (29.5% of population ≥ 18 years old) and only 4.0 million are fully vaccinated (nearly 6.0% of population ≥ 18 years old). Notably, HCMC made tremendous progress in its vaccine rollout with nearly 90% of the city’s population aged 18 or above receiving at least one dose (11.4% are fully vaccinated).  

Industrial output fell at its fastest rate since April 2020. The overall Index of Industrial Production (IIP) dropped 7.4% YoY in August — with the IIP of the manufacturing sector plunging 9.2% YoY — which are the sharpest declines since April 2020. IHS Markit’s manufacturing PMI also plunged to 40.2 in August — the second lowest reading ever recorded — indicating a sharp contraction in business conditions for three months in a row. Business conditions of the manufacturing sector are likely to remain weak in the coming month given the continuing high number of daily COVID-19 cases in southern provinces that has forced the Government to extend social distancing measures. 

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