In its report for the month the General Statistics Office said the fourth Covid wave has had a "severe impact" on the economy whereas in July it had had a "negative impact."

The index of industrial production is estimated to have fallen by 4.2 percent from July and 7.4 percent year-on-year, the highest drop this year except in February when there was an eight-day holiday for the Lunar New Year.

The biggest drops were seen in southern localities including Ho Chi Minh City where Covid has had the most impact.

The index fell by 60 percent year-on-year in Ben Tre and Dong Thap, over 49 percent in Ho Chi Minh City and 41.5 percent in Vinh Long.

For the year-to-date the decline has been 6.6 percent in HCMC.

"Many factories have had to reduce capacity or shut down to fight Covid-19," a report by the city statistics office said.

Many struggle to source materials due to transport restrictions and sales are hurt since it also makes distribution difficult.

The fisheries industry is among the victims. Over 50 percent of pangasius fish plants in the Mekong Delta and in the east of HCMC have shut down, according to the Vietnam Association of Seafood Exporters and Producers.

It feared a complete breakdown of the seafood supply chain is imminent.

Retailers were also hit by the travel curbs, with revenues from sales of consumer products and services plunging by nearly 34 percent year-on-year in August as against 20 percent in July.

They also remained pessimistic about the rest of the year.

"The tightened social distancing in many localities to control the outbreaks is set to bring down August sales," a Mobile World executive had told investors last month.

He had warned that if the stringent travel curbs remain for the rest of the year, the company would have trouble achieving its annual target.

Jobs are dwindling.

Public spending, which is expected to lift the economy out of its slump, fell nearly 25 percent year-on-year in August to VND34.9 trillion.

Only half the planned spending for the first eight months has been done.

Exports in August fell 6 percent from July to $26.2 billion as many countries, including top market the U.S., saw rising difficulties caused by the Delta variant.

But some northern provinces like Hai Phong, Bac Ninh and Quang Ninh bucked the trend, with their industrial production growing year-on-year at 20.6 percent, 9.8 percent and 7.4 percent thanks to a recovery in electronic and garment exports.

So far in the fourth wave that hit Vietnam in late April, the nation has recorded nearly 458,000 Covid-19 cases as of Wednesday.