The urban unemployment rate in the second quarter was at a 10-year high of 4.46 percent, according to the General Statistics Office.

It had risen by 1.28 percentage points from the previous quarter and 1.3 percentage points from a year earlier, but Deputy Minister of Labor, Invalids and Social Affairs Le Van Thanh told VnExpress that things are likely to worsen.

He explained the reason for his fears.

The pandemic has flared up again after 99 days, and the number of locally transmitted cases is rising, and several cities and provinces have imposed social distancing or at least banned people from gathering in groups of more than 30.

In the U.S., Europe and China, Vietnam’s three major export markets, there is no sign of the pandemic coming under control.

A vaccine will not be available anytime soon, and the risk of community transmission remains high.

In the third quarter Vietnam’s exports to its leading markets will be seriously affected. At the same time supply of feedstock needed for production is petering out due to the congestion in trade flows due to the impacts of Covid-19.

The worst-case scenario envisaged by his ministry is that another 60,000-70,000 people will lose their jobs each month until the end of the year, mostly in tourism, services, construction, transport, and manufacturing, Thanh said.

Seventy percent of businesses could be affected in the coming months, and the number of workers losing their jobs or working hours could be 3.5-5 million, it said.

In the first half of this year 29,000 companies suspended operations. To put the effect of the pandemic in perspective, this was 38.2 percent more than in the same period last year.

In the second quarter around 1.3 million people aged 15 and above were jobless, 221,000 more than in the year-ago period.

Thanh said this too was because Vietnamese companies had few export orders and lacked feedstock for manufacturing.

With Covid-19 making social distancing imperative, the tourism and service sectors have been hit badly.

The government has decided that both businesses and workers need support.

For now it is reforming administrative procedures and seeking to improve the business environment.

The central bank has been instructed to offer businesses low-interest loans for longer tenures and on easier terms.

Businesses have also been offered tax and fee breaks.