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Registered FDI reached about US$2.1 billion in December 2020, roughly 28.9 percent lower than inthe previous month, and 66.3 percent lower than inDecember a year ago.

Industrial Production Plays Important Role in Vietnam’s 2020 Economic Performance
Industrial production continued to recover strongly in December, returning to its pre-pandemic growth rates.
In December 2020, industrial production index grew again after the brief November slump.
The index grew by 11.1 percent (y/y), the highest growth rate since the pandemic outbreak in February. The main subsectorssupporting this growth were coke and refined petroleum products, metals production, computer,electronic and optical products, food productionand processing, electrical equipment, and paperand paper products. 
The country’s Manufacturing Purchasing Managers' Index (PMI) increased from49.9 in November to 51.7 in December, signalingan expansion of the manufacturing sector.
Retail sales also continued to grow, thanks to strengthening domestic demand for goods.
Retail sales (SA) grew at 9.4 percent (y/y) inDecember 2020, the highest growth rate sinceFebruary 2020. Growth is driven bydomestic demand with retail sales of goods 13.8 percent higher than in the same period last year. On the other hand, with international travel restrictions, sales of accommodation and catering,and traveling services in December 2020 fell 5.4 percent and 68.2 percent (y/y), respectively.
Merchandise trade continued an eight-month streak of surpluses.
December merchandise exports and imports (SA)grew 17.8 percent and 23.1 (y/y) percentrespectively, recording the highest growth rates since the outbreak of the coronavirus pandemic in February 2020. Consequently, Vietnam’s merchandise trade balance (SA) reached US$279.6 million in the December of 2020, continuing an eight months streak of surpluses and ending the year with a record total of US$19.3 billion. 
While exports of textiles and apparel, footwear andagricultural products continued to decline in thewake of the pandemic, those of phones rebounded by 50.8 percent (y/y) in December 2020, joiningcomputers and electronics in registering growth.
Overall, in 2020 trade varied considerably across partners, with exports to the United States andChina growing solidly by 24.5 percent and 17.1 percent, respectively, while those to EU, ASEAN,Korea and Japan fell. Similarly, Vietnam importedmore from China, Japan and EU, but less fromKorea, ASEAN and U.S. in 2020 than in 2019.
Registered FDI reached about US$2.1 billion in December 2020, roughly 28.9 percent lower than in the previous month, and 66.3 percent lower than inDecember a year ago. Overall, thecountry attracted over $28.5 billion of FDI in 2020,which while about 25.0 percent lower than in 2019,remains a remarkable achievement  given UNCTAD’s projection of 30-45 percent decline in FDI inflows to East Asia in 2020.
Inflation continued to fall as food prices stabilizedwhile domestic demand has not fully recovered.
The Consumer Price Index (CPI) fell by 0.3 percent(m/m), marking a third consecutive decline.Compared to December 2019, CPI rose only 0.1percent (Figure 5). Falling inflation can mainly beattributed to softer food price in Decembercompared to November 2020.
Furthermore,despite continuing recovery, consumer demand remained weaker than a year ago, thereby exertingdownward pressure on prices.

DIEP NGUYEN