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WB: Vietnam's prospects appear positive, the economy is projected to grow by about 6.8%

23/12/2020

According to the World Bank, Vietnam’s economy is projected to grow by about 6.8 % in 2021 and will stabilize around 6.5% in the following years.

According to the World Bank's latest update on Vietnam's recent economic developments “Taking Stock”, despite facing the biggest global shock in decades, Vietnam’s economy is projected to grow by about 3% in 2020 while the world economy is expected to decline by at least 4%.

Mr. Jacques Morisset - the World Bank Lead Economist for Vietnam - said that Vietnam has achieved the above results thanks to the resilience of both the domestic economic sector and the external sector. Not only can the pandemic be curbed with early, drastic and innovative measures, the Government has also used fiscal and monetary policies to overcome difficulties for the private sector and promote recovery. Public spending, for example, began to increase again after three years of tight fiscal. In the first nine months of 2020, public investment disbursement increased by 40% over the same period last year.

The external sector—the main driver of economic growth in Vietnam over the past decade—has performed exceptionally well since the beginning of the COVID-19 crisis. Vietnam is expected to achieve the largest trade surplus ever, and foreign exchange reserves to increase, said Jacques Morisset.

In addition, the continued inflow of foreign investment into Vietnam, combined with the surge in exports of goods, compensated for the loss of foreign currency earnings due to declining tourism activities and shrinking remittances. Foreign investors have continued investing and/or shifting production activities to Vietnam as the country has well managed the pandemic.

The World Bank also forecasts that, in the upcoming period, Vietnam's outlook is considered positive when the economy is forecast to grow at around 6.8% in 2021 and will stabilize around 6.5% in the following years. This prediction is based on the assumption that the Covid-19 crisis will gradually be under control, as the Covid-19 vaccine proves its effectiveness. However, the magnitude and length of a pandemic and its economic impacts are hard to predict, and a lower growth scenario cannot therefore be ignored, Mr. Jacques Morisset stressed.

In addition, Vietnam still has potential financial, financial, and social risks that require more attention from competent authorities.

 

Kylie Nguyen

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