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International organizations adjust Vietnam's economic growth forecast in 2021 amid COVID-19 waves


Among the organizations that made predictions about Vietnam's economic growth in 2021, the most optimistic level came from S&P Global Ratings with a forecast of 8.5%. At the start of the 4th wave of COVID-19, several organizations lowered their growth forecasts for Vietnam.

In forecasts published in April - when the 4th wave had not yet occurred in Vietnam, Oxford Economics, IMF, World Bank, HSBC are of the opinion that Vietnam's economy would grow at 6.4%-6.6 %, this level is lower than previous forecasts at the end of 2020, Fitch Solutions only forecast at 7%.

Among international organizations, S&P Global Ratings gives the most optimistic forecast about Vietnam's economic growth this year. In October last year, S&P expected Vietnam's GDP growth to reach 11.2%. At the latest forecast on May 21 - when a new wave of COVID-19 occurred in Vietnam, this organization adjusted its forecast for Vietnam's GDP growth in 2021 to 8.5%. However, this forecast is quite high compared to other organizations.

S&P expects Vietnam to recover at 8.5% this year before moving closer to the long-term trend growth rate from 2022 onwards. The credit rating agency also kept the sovereign credit rating of Vietnam unchanged and upgraded the outlook from stable to positive. According to S&P, the attractiveness of Vietnam as a leading destination for FDI in Southeast Asia, along with a young workforce, will help maintain the country's long-term development trajectory.

The latest forecast comes from Standard Chartered Bank. On May 31, this bank said it had adjusted its GDP growth forecast for Vietnam from 7.8% to 6.7%.

Another organization that also announced an adjustment to Vietnam's economic growth forecast but in an upward direction is the Asian Development Bank (ADB).

Previously in December 2020, this bank gave a forecast of 6.1%, and in early May increased to 6.7%. At that time, the 4th wave of COVID-19 pandemic began and Vietnam had only recorded a few cases in the community.

ADB said that "growth momentum continues to be strong and stable thanks to Vietnam's success in controlling the pandemic".

Regarding risks, ADB said that the outbreak due to the appearance of variants and the delay in the COVID-19 vaccination plan are the difficulties that Vietnam has to face.

In addition, the report said that the world's delay in vaccine implementation could also have an immediate impact on Vietnam's return to the pre-pandemic high growth trajectory.


Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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