This research examines the evolving impact of COVID-19 on global trade from January to August in 2019 and 2020. Analyzing exports from 34 countries to 173 nations, we utilized various variables to gauge pandemic effects. Our findings indicate consistent negative repercussions on international trade for both exporting and importing countries. However, these effects, particularly in importing countries, tended to diminish after July 2020, suggesting some adaptation to the initial pandemic wave. Furthermore, diverse impacts were identified across industries, with prolonged negativity in non-essential durable goods and positive effects in medical product sectors.
Caution with inflation, but not overly concerned
As 2022 comes to a close, Vietnam has successfully managed inflation despite significant pressure from the global price "storm." Moving into 2023, the international environment is expected to be more favorable, but domestic inflationary pressures are anticipated to persist. In 2022, inflationary pressure was largely driven by the international environment through two main channels. The surge in global commodity prices, exacerbated by the Russia-Ukraine conflict, further complicated global supply chain disruptions, coupled with strong consumer demand recovery after the Covid-19 pandemic. Secondly, many countries' currencies depreciated significantly as the US Federal Reserve tightened monetary policy, raising interest rates by an additional 4.25% per year, from 0 - 0.25% to 4.25 - 4.5%. Vietnam must remain cautious in the face of uncertainties from the international environment. Firstly, political instability in certain regions globally poses a threat to the global supply chain, leading to unpredictable price fluctuations. Secondly, the impact of China reopening its economy after a 3-year COVID-19 lockdown needs careful assessment.
US economy and some adjustment policies
In recent times, the US economy has experienced a robust recovery following the lifting of COVID-19 lockdowns and social distancing measures. In 2023, the US economy exhibited strong growth amidst concerns about inflation, rising interest rates, and fears of a recession. This was attributed to various policy adjustments aimed at alleviating economic challenges. Playing a crucial role in the global economy, these changes are expected to have a significant impact on the worldwide economic landscape, including Vietnam. The Federal Reserve (FED) continued to make decisions to raise interest rates during FOMC meetings, with a 0.25 basis point increment. The prolonged period of near-zero interest rates (2009-2022) and the postponement of rate hikes in 2021, amid escalating inflation, compelled the FED to make consecutive rate hikes in four meetings throughout 2022. The proposed 2023 budget by the US government aims to reduce the federal budget deficit by approximately $1 trillion over the next decade. Additionally, the US Treasury Department suggested implementing a 15% minimum global corporate tax rate by denying deductions for taxes paid in countries or territories with rates below 15%