03.11.2020, 15:25

Vietnam’s economy is forecasted to rebound strongly

The International Monetary Fund (IMF) revised down its forecast for Vietnam’s GDP growth to 1.6% in 2020 from a previous estimate of 2.7% in June. Vietnam, however, remains the only country among major economies in ASEAN – 5 (Thailand, Malaysia, Indonesia, the Philippines, and Vietnam) expected to deliver positive growth this year.

The Asian Development Bank (ADB) said that Vietnam’s economy could grow 1.8% this year, showcasing its resilience despite deleterious impacts of the Covid-19 pandemic.  The lender attributed the positive growth to the government’s success in containing the pandemic. The Asian Development Outlook (ADO) 2020 Update said that Vietnam will benefit from the continued diversion of production from China and the implementation of a free trade agreement with the E.U., which came into effect on August 1.

In its October country report, the World Bank (WB) said the third quarter rebound would help Viet Nam meet its GDP growth target of 2.5-3% this year. Despite these challenges, the WB forecast a GDP growth of 2.8% for Vietnam this year, making it one of only two countries in ASEAN to record positive growth.

The ASEAN Post forecast that overall Vietnam’s growth in 2020 is expected to be in the range of 2.9%. As the current Chair of the Association of Southeast Asian Nations (ASEAN) for 2020, Vietnam has been actively involved with the association since 1995 when it joined the bloc with the aim of bringing all Southeast Asian countries together to promote regional peace, freedom, and prosperity.

Standard Chartered expects Vietnam’s economy to grow by 3 per cent in 2020 and surge to 7.8% in 2021, according to Global Research report entitled “Viet Nam – Q3 disruption, but recovery remains intact”. Vietnam is one of the few Asian economies to have registered positive growth so far this year, despite the second wave of infections.

According to the latest macroeconomic report on Vietnam, a likely improvement in external demand in the fourth quarter should support manufacturing growth, forecast at roughly 7.3% in full-year 2020.

Vietnam’s economy is set to rebound strongly by 8.1% in 2021, HSBC has said in a latest report titled “Asia Economics: It’s about stamina.” HSBC also revised down its GDP growth forecast for Vietnam from 3% to 2.6% in 2020, accounting for the negative impact of the second wave.

S&P Global Ratings forecast Vietnam would likely be the second fast-growing economy in Asia-Pacific this year, only behind China, as the Southeast Asian country has emerged as a bright star in containing the Covid-19 pandemic.

S&P Global Ratings revised up Vietnam’s GDP growth to 1.9% this year from 1.2% previously. Overall, Vietnam is expected to be one of the leaders of the post-COVID-19 recovery, able to close its output gap by 2022. Its 2021 growth is forecast at 11.2%, the highest in the Asia-Pacific region.

Investment bank Goldman Sachs forecast Vietnam’s GDP to grow by 2.7% this year and 8.1% next year, driven by exports.

Kim Anh, @Vietnamnet