牛津经济研究院-越南农业食品部门的经济影响（英）-2021.6-28页_2mb

AGRI-FOOD SECTOR IN VIETNAM: SUMMARY

Core Content

The agri-food sector is a vital component of Vietnam's economy, contributing significantly to GDP, employment, and tax revenues. It is a key driver of economic stability and growth, especially during the challenges posed by the COVID-19 pandemic.

Main Points

• Economic Contribution: In 2019, the Vietnamese agri-food sector contributed USD 86.4 billion to GDP, accounting for 26% of the total economy. This includes:

  • Agricultural production: USD 55.3 billion (63% of total agri-food GDP contribution)
  • F&B manufacturing: USD 16.6 billion (19%)
  • F&B distribution: USD 14.5 billion (17%)

• Employment: The sector supported 27.5 million jobs in 2019, representing over 50% of the country's total workforce. Employment breakdown:

  • Agricultural production: 20.45 million (75% of total agri-food employment)
  • F&B manufacturing: 2.83 million
  • F&B distribution: 4.22 million

• Tax Revenue: The agri-food sector generated USD 13.2 billion in tax revenues in 2019.

• Trade Balance: Vietnam has a strong net export position in agri-food products, with USD 25.5 billion in exports and USD 15.8 billion in imports in 2019, resulting in a USD 9.7 billion trade surplus. The surplus is mainly driven by:

  • Processed F&B products: USD 5.7 billion
  • Agricultural products: USD 4.0 billion

• Growth Trends (2015–2019):

  • The total agri-food sector grew by 12% in real terms.
  • The fastest growth occurred in F&B manufacturing and distribution.
  • Agricultural production also grew, but at a slower pace, with a 6% real GDP increase.

• Impact of the Pandemic (2020):

  • Despite the pandemic, the agri-food sector grew by 4% in real terms, contributing USD 3.7 billion more to GDP in 2020.
  • Productivity growth continued, leading to a small contraction in employment of 90,000.
  • Agricultural production increased by 7%, with USD 2.5 billion of growth attributed to direct activities.
  • F&B manufacturing grew by 5%, adding USD 0.9 billion to GDP and employing 10,000 more people.
  • F&B distribution saw a contraction, with USD 1.0 billion less GDP contribution. The hospitality sector (catering and accommodation) was particularly affected, with 38% and 16% declines, respectively.

Outlook and Risks

• Outlook: Vietnam's agri-food sector is less vulnerable compared to other Southeast Asian countries due to its early containment of the virus and strong economic fundamentals. The outlook for 2021 is positive, with strong food spending and stable exchange rates expected to support growth.

• Fiscal Policy Risks: The sector is exposed to potential fiscal policy risks, especially from new excise taxes on items such as sugar, salt, and plastics. These taxes could:

  • Disproportionately affect small businesses.
  • Damage local industries.
  • Burden low-income households.
  • Fail to generate sufficient fiscal revenue.

• Policy Recommendations: Excise duties should be well-designed, evidence-based, and efficiently regulated to avoid harming the agri-food sector's recovery.

Conclusion

The Vietnamese agri-food sector is a major economic pillar, contributing to GDP, employment, and tax revenues. While it has shown resilience during the pandemic, it faces long-term challenges such as rising demand for higher-quality food, the need for productivity improvements, and fiscal policy risks. A supportive policy environment and strategic investments are essential for sustaining growth and ensuring the sector continues to thrive.