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Vietnam's economic growth will recover and is expected to reach 7% by 2021

12/05/2020

That is the remark made by the International Monetary Fund (IMF) on May 11. According to the IMF, Vietnam's economic growth will slow to 2.7% in 2020 due to the impact of the Covid-19 pandemic, however it is expected to rebound strongly to 7% in 2021.

Vietnam's economy is facing many difficulties due to Covid-19 pandemic. The outbreak of the disease has strongly affected all of Vietnam’s important trade and investment partners.

According to many international organizations, Vietnam is a good example of success in controlling Covid-19. Vietnam's outbreak prevention and control measures in the fight against acute respiratory infections caused by the new strain of coronavirus (Covid-19) continue to be considered by the international public opinion as fast, drastic and have the support of the whole population.

When the measures used for prevention and control of the Covid-19 are no longer applied, along with key conditions such as Vietnam's fairly solid macroeconomic foundations, supported by monetary and fiscal easing, and increased export demand, the above growth can be achieved.

Many regional and international financial institutions, credit rating agencies, and economic experts are still optimistic about Vietnam's economic prospects, assessing Vietnam's economy will be favorable in the medium term, soon return to growth trajectory.

IMF Chief Representative in Vietnam, Francois Painchaud, said that recently, Vietnam as well as other countries have adopted social distancing measures to prevent the spread of Covid-19. The global economic downturn trend and the decline in domestic demand are factors that are expected to slow Vietnam's economic growth in 2020, compared to an average of about 7% in 2018 and 2019. The IMF stated that in 2020, Vietnam's economic growth will slow to 2.7%. However, Vietnam's economic growth momentum will recover and growth is expected to reach 7% by 2021.

In early April, the Asian Development Outlook (ADO 2020) report released by the Asian Development Bank (ADB) stated that, if the pandemic is brought under control in the first half of 2020, the economic growth will be 6.8% in 2021, which is similar to the ADB forecast before the Covid-19 outbreak.

In the medium and long term, Vietnam's economy will continue to grow strongly. ADB Country Director for Vietnam Eric Sidgwick commented that, despite declining economic activity and pandemic risks, Vietnam is still one of the fastest growing countries in Southeast Asia.

 

Kylie Nguyen

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