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Thousand Unemployees Before Tet (LNY)

Posted by Khoi Pham on December 6, 2022
0

Less than a month, the world will celebrate the new year 2023. However, the most expected thing is probably not fireworks, but a positive signal for the approaching recession.

Inflation peaked, the dollar appreciated, large markets cut đown consumption, leading to a wave of unemployment in the manufacturing sector.

Can Vietnam stand firmly in influence of the world economy?

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New year is coming so close…

Uncertain Forecast of The World Ecomony

As predicted, the global inflation rate in the third quarter of 2022 is 9.8%, forecasted to decrease to 9.5% in the last 3 months of the year and cool down to 5.3% next year.

However, the problem of bringing inflation back to 2% is still a big challenge for economies, plus the growth rate is still low, causing many countries to face the risk of recession. The fact that the FED raised interest rates from near 0 to 5% (forecast) within a year to tighten the currency and control inflation in the US made the US dollar soar to 18% in a short time. This weakens the local currencies of some countries, pushing up the prices of goods and services.

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According to predictions of Bloomberg, the economic picture in 2022 is still bright compared to the forecasts for 2023

Facing the brink of recession, people in major markets such as the US, Europe and China “tighten their belts” to prepare for the recession period that is expected to happen next year.

Will people around the world welcome a gloomy new year?

Over 41,000 Vietnamese Workers Lost Their Jobs

The above figures are counted in 44 provinces and cities in Vietnam from mid-2022 for employees with contracts in enterprises.

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Factory workers off shift

The cuts mainly occurred in labor-intensive businesses such as leather and footwear, textiles, wood processing, seafood, processing electronic and mechanical components. Demand dropped sharply, supply was hesitant due to the influence of the world situation, causing manufacturing companies to fall into a state of “hungry” for orders but with excess workers, leading to staff reductions.

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The majority of employees have their working hours cut or have an early Tet holiday because the factory has no orders (based on data from the Vietnam General Confederation of Labor)

According to the Ho Chi Minh City Business Association, many southern enterprises have to downsize production and lay off workers because key export markets such as the US, Europe and Japan have not yet recovered. Specifically, Europe decreased by 60%, the US decreased by 30-40%… Stagnation also occurs in the logistics, technology industries… when the number of Tet orders is no longer as explosive as every year, causing staff to concerned.

Will There Be Light At The End Of The Tunnel?

Despite many forecasts of a gloomy economy in 2023, there is still the possibility of growth and avoiding a deep crisis.

  • Assessments of the US and European economies still mention the possibility of recovery and return to the market after Q4/2023 after short-term recessions.
  • The Chinese government has made moves that will adjust the Zero Covid policy, opening goods.
  • Russia-Europe relations in the field of energy are having certain considerations to resolve the crisis.

Regarding the issue of staff reduction in Vietnam, the Vietnam Confederation of Commerce and Industry (VCCI) has proposed to deduct the Unemployment Insurance Fund to support workers. This is considered as one of the temporary solutions while waiting for the world economy to recover.

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Statistics of personnel receiving unemployment benefits (According to Vnexpress)

However, economists are still very cautious with forecasts in 2023 because the next developments will depend on the resilience of developed economies. Nevertheless, the world economy will not perform too badly even though difficulties and challenges are still there.

People in Vietnam and around the world may welcome a new year with less money than before, but at the same time, they are also starting a new phase and have the right to expect a recovery in the near future. 

Please contact Realtique for latest update of special projects and events on the market.

Realtique Co., LTD 

[email protected]

+84866810689 (WhatsApp/Viber/Zalo/WeChat)

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