ICAEW: Vietnam grows 2.3% in 2020 and then will skyrocket to 8% by 2021
Covid-19 has been shocking the worst growth in Southeast Asia since the Asian financial crisis in 1997. According to the latest Economic Outlook Report from the British Institute of Chartered Accountants and In Wales (ICAEW), the growth of the whole region is forecast to decrease by 4.2% by 2020.
Vietnam is forecast to grow 2.3% GDP this year and will reach 8% by 2021.
The report also predicts that the recovery outlook looks brightest for Vietnam, which has been so effective at preventing the epidemic. Vietnam is projected to be the only Southeast Asian economy to see positive growth this year, with GDP growing 2.3% in 2020 and 8% in 2021.
In the Global Economic Outlook report from Oxford Economics, ICAEW stated that economic activity is starting to recover and growth is expected to recover at 6.4% next year. 2021. However, the rate of recovery in the second half of 2020 will vary between countries in the region, depending on the easing of closure restrictions and the strength to improve export demand.
The Covid-19 outbreak had reduced global GDP by about 9% in the first half of 2020, at least three times the size of the 2007-2009 global financial crisis. Although there was a recovery in the third quarter at 6.4%, the report shows that world GDP will drop 4.4% overall in 2020.
However, the world economy is recovering in the second half of 2020, which is expected to drive growth to 5.8% by 2021 and lead the global economy back to its level the pre-crisis peak in the middle of the following year, similar to the 2008 financial crisis recovery timeframe.
As for Southeast Asia, a strong recovery in economic activity in the coming quarters remains uncertain, especially in Q4 2020, after predicting a strong recovery in global trade and post-lockdown domestic operations did not go as expected.
In addition, differences in the degree of success in stopping the Covid-19 outbreak and the closure strategies will increase the disparity in economic growth between the countries in the region. Countries that have been successful in stopping outbreaks like Thailand and Vietnam will see a stronger recovery than Indonesia and the Philippines – which are facing new Covid-19 outbreaks after the restrictions soon were loosened.
The recovery rate of Southeast Asian countries in the second half of this year will vary
Although growth in Singapore is forecast to decline 5.7% this year due to a sharp decline in global trade. However, signs of recovery in exports and imports will boost the country’s economy to grow again to 6.1% by 2021. Export-oriented economies such as Singapore and Vietnam will continued to benefit from a steady stream of trade indicators, reflected in improvements in exports over the past few months.
The report also predicts that the outlook for a recovery looks brightest for Vietnam, which has been a very effective deterrent so far. Vietnam is projected to be the only Southeast Asian economy to see positive growth this year with GDP growing 2.3% in 2020 and 8% in 2021.
Meanwhile, while Malaysia’s exports are expected to benefit from improved Chinese import demand and the electronics cycle, the country’s economic recovery may slow down. Global demand remains slow, unemployment is high and investment is weak. Malaysia’s economy is forecast to decline 6% this year and grow 6.6% by 2021.
The pace of economic recovery in Indonesia and the Philippines is still quite precarious, as infections have risen again after closure restrictions were eased, leaving plans to reopen in these two countries temporarily suspended. Both economies remain highly vulnerable due to weaker public health infrastructure, lower levels of financial assistance, and more consumer-dependent growth than other economies in area.
The pace of recovery in Indonesia is expected to slow and household incomes will be squeezed. GDP is expected to drop 2.7% in 2020 and increase 6.2% by 2021. The Philippines is expected to have the largest decline in Southeast Asia, with GDP falling as high as 8.2% in 2020, due to dependence on international travel and a slowdown in closing restrictions.
Mr. Mark Billington, Director of ICAEW Southeast Asia and China said: “The recovery of economies in Southeast Asia will be a long way, as US-China tensions are still in progress. In the meantime, global trade has slowed for a long time and the prolonged Covid-19 pandemic weighs heavily on the region’s growth prospects “.
“Although each country in the region is affected by the crisis, but the degree of crisis occurring in different economies depends on the economic structure of each country. The balance between staying economically active and controlling outbreaks shows that their economies will recover faster than the rest of the world, ”said Mark. Billington said.
Source: ndh.vn – Translated by fintel.vn
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