With unprecedented characteristics and immense destructive power, Typhoon Yagi that made landfall on September 7, inflicted serious harm on life and property in 26 provinces in North Vietnam, significantly disrupting production and business activities. Restoring production and business to meet the established GDP growth target of 7 per cent will be a significant challenge.

GDP growth cut

The Ministry of Planning and Investment (MPI) has reported that, compared to the updated projections presented during the regular government meeting in August, national annual GDP projections have come down by about 0.15 percentage points. The agricultural, forestry, and fisheries sector has been hit hardest, with a decline of 0.33 percentage points, while the industrial and construction sector decreased 0.05 percentage points and the services sector by approximately 0.22 percentage points.

Typhoon Yagi severely impacted the production and business activities of many localities that are key growth drivers in Vietnam. According to the General Statistics Office, the annual growth decline in various localities compared to the initial gross regional domestic product (GRDP) growth estimates from July is as follows: Hanoi 0.2 percentage points, Hai Phong 0.63 percentage points, Quang Ninh 0.65 percentage points, Cao Bang 0.51 percentage points, Lao Cai 0.63 percentage points, Tuyen Quang 0.5 percentage points, Yen Bai 0.53 percentage points, and Thai Nguyen 0.59 percentage points.

“The damage caused by the storm presents a significant challenge to growth over the remainder of the year,” Minister of Planning and Investment Nguyen Chi Dung told at a recent government meeting with localities affected by the typhoon. “Our estimates indicate that GDP growth in the third quarter may be cut by 0.35 percentage points and by 0.22 percentage points in the fourth quarter compared to a scenario without Typhoon Yagi.”

The economy exhibited signs of clearer growth in the months before the typhoon, with improving export performance as the year-end period approached, more active public investment disbursement, and rising consumption. However, the devastation from Typhoon Yagi and the resulting flooding have broadly disrupted production and business activities at both companies and household enterprises.

Farms, rice growers, crop producers, livestock farms, and aquaculture operations in most areas impacted by the typhoon suffered the greatest losses and will require substantial resources and time for recovery, particularly as the northern region is currently in the planting season and not yet in the harvest period.

Many tourism and accommodation facilities were damaged and must close for repairs, leading to the region missing out on the international tourist season from September to April and potentially failing to attract domestic visitors, especially in key destinations such as Hanoi, Hai Phong, Quang Ninh (Ha Long Bay), Lao Cai (Sapa), and Ha Giang.

Industrial and construction companies have also felt the effects of the storm, particularly through indirect impacts such as power outages, loss of communications, and disruptions to their workforce. Many companies have experienced collapses at warehouses, damage to material storage areas, failures in crane rails, and issues with transformers and generators, all of which affect production and business.

Resuming production

Mr. Nguyen Van Hung, Deputy General Director of the Do Luong Garment JSC in Thai Binh province, told local media that his company suffered losses of more than 300,000 meters of fabric and over 12,000 semi-finished products, which will undoubtedly affect its production plans for the months to come, particularly in September and October. “Nonetheless, to quickly restore production and prevent delays in orders, especially for signed export contracts, we concentrated on resolving everything within a day after the storm,” he explained. “We transported all intact equipment and dry finished products to restart production.”

Similarly, Mr. Trinh Van Quang, Director of Project Development at Vina CPK, the developer of the Ba Thien II Industrial Park in Vinh Phuc province, said that to avoid production disruptions the industrial park (IP) rapidly mobilized staff and machinery to clear over 900 fallen trees on-site immediately after the storm, ensuring smooth internal traffic.

Moreover, the IP has arranged for technical personnel to be on standby 24/7 to manage electrical and water issues, preventing any further disruptions to the production activities of businesses. “As a result, the IP’s drainage system functioned effectively, avoiding flooding problems that could affect operations,” he said. “Electrical issues at companies were also addressed promptly, ensuring there were no delays to production and business plans.”

Despite facing significant losses, many farms and businesses are starting to plan their return to production, even if it may take a month to rebuild facilities. The determination of individuals and businesses to achieve their operational and investment goals is clear to see.

At the local level, Quang Ninh, which was severely impacted by the storm, remains committed to achieving its high growth targets set for 2024. “We aim to maintain double-digit growth this year,” according to Mr. Cao Tuong Huy, Chairman of the Quang Ninh Provincial People’s Committee.

In a similar vein, Mr. Le Tien Chau, Secretary of the Hai Phong City Party Committee, said the port city is focused on addressing the aftermath of Typhoon Yagi and facilitating business operations. It will extend or delay timelines for inspections and audits of businesses currently in progress, while the timeline will be shifted to 2025 for those scheduled but not yet executed.

Overcoming the storm

According to the MPI report contained in the government’s proposal for Resolution No. 143/NQ-CP dated September 17 and outlining key tasks and solutions for recovery, the estimated total damage from Typhoon Yagi exceeds VND50 trillion ($2.04 billion), which is notably higher than the earlier estimate of VND40 trillion ($1.63 billion).

While the actual damage may be even greater due to unaccounted losses, Prime Minister Pham Minh Chinh emphasized the importance of ensuring that no one goes hungry, lacks clothing, suffers from cold or insufficient clean water, or faces homelessness. It is crucial to maintain essential daily activities and effectively recover from the impact of the typhoon.

Additionally, it is vital to swiftly stabilize the mental and material conditions of the population, restore production and business operations, manage inflation effectively, and aim for annual GDP growth of approximately 7 per cent. “To reach growth of 7 per cent, it is essential to focus our efforts on restoring production and business,” the Prime Minister highlighted.

The government’s approach emphasizes that support policies and solutions must be quick, feasible, timely, effective, and targeted directly at those affected. The procedures and conditions for beneficiaries should be straightforward, easy to implement, and readily monitored and evaluated.

Support is primarily scheduled for September and October, with some policies for businesses and households possibly extending or receiving additional resources until the end of 2025 to align with recovery efforts and seasonal production factors.

Specifically, the rapid restoration of production, supply chains, and workers, and the recovery and growth of businesses is critical to maintaining momentum and achieving recovery in localities and the economy throughout the remainder of 2024.

Six key tasks and solutions for recovering from Typhoon Yagi and restoring production

The government issued Resolution No. 143/NQ-CP on September 17, outlining key tasks and solutions to urgently deal with the consequences of Typhoon Yagi and subsequent floods and landslides in order to stabilize people’s lives, promote the recovery of production and business, boost economic growth, and control inflation.

Under the Resolution, six groups of major tasks and solutions have been identified.

1. Protecting people’s lives, safety, and health: The Ministry of Finance and local authorities will utilize State budget reserves and other legal resources to urgently relocate households and communities in areas at high risk of landslides, with a deadline of September 30 set.
2. Supporting the recovery of daily and social activities to stabilize people’s lives: The Ministry of Agriculture and Rural Development will assess the extent of damage and the support needs of localities, reporting its findings to the Ministry of Planning and Investment and the Ministry of Finance for budget allocation. The Commission for the Management of State Capital at Enterprises will direct State-owned enterprises to prioritize the restoration of essential infrastructure such as electricity, water, and telecommunications as quickly as possible, to meet residents’ needs. The Ministry of Transport, Ministry of Agriculture and Rural Development, and localities will use State budget reserves to promptly repair public works, schools, hospitals, and irrigation networks.
3. Supporting production establishments, business households, cooperatives, and enterprises to quickly resume production: The Ministry of Agriculture and Rural Development will implement flexible production plans and recovery measures to restore agricultural production immediately following the storm. The Ministry of Finance will expedite tax exemptions, reductions, and deferrals for affected individuals and businesses. The State Bank of Vietnam will report to the Prime Minister on asset classification and risk provisions, directing credit institutions to support impacted customers by restructuring debts and offering preferential loans.
4. Preparing against future natural disasters: Ensuring readiness to respond to future natural disasters, floods, and landslides.
5. Simplifying administrative procedures to implement support policies: Streamlining mechanisms and policies to facilitate the implementation of support measures.
6. Controlling inflation and promoting economic growth: Ministries and local authorities will monitor market conditions and prices to develop effective strategies for market stabilization. They will promote production to ensure a sufficient supply of goods, enhance oversight of price management regulations, and take strict legal action against price speculation and manipulation.