ADB lifts Vietnam’s economic growth forecast to 2.3% this year

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Vietnam's economy grew rapidly from the rate of 0.4% in the second quarter of 2020 to 2.6% in the third quarter, expanding the average growth rate in the January to September period to 2.1%. Hence, ADB adjusted its forecast for Vietnam’s economic growth from 1.8% to 2.3% in 2020, Nhan Dan Newspaper reported.

Meanwhile, Vietnam’s economic growth in 2021 is predicted to decline to 6.1%.

The recovery of domestic consumption is forecast to increase Vietnam's economic growth. Photo: Nhan Dan

In terms of Southeast Asia, economic growth remains challenging due to continued novel coronavirus (COVID-19) outbreaks and containment measures, particularly those occurring in Indonesia, Malaysia, and the Philippines.

The subregion’s growth forecast for 2020 is revised down to -4.4% from -3.8% in September, while its outlook for 2021 is also downgraded, with Southeast Asia now expected to grow 5.2% next year compared to the 5.5% growth forecast in September, noted the ADB, HanoiTimes reported.

Overall, economic activity in developing Asia is forecast to contract by 0.4% this year, before picking up to 6.8% in 2021 as the region moves toward recovery from the effects of the Covid-19 pandemic.

The new growth forecast is an improvement from the -0.7% GDP growth forecast in September, while the outlook for 2021 remains unchanged.

Workers examine smartphone components at a factory in the northern province of Hai Duong. Photo: VnExpress/Thu Nguyen.

“The outlook for developing Asia is showing improvement. Growth projections have been upgraded for China and India, the region’s two largest economies,” said ADB Chief Economist Yasuyuki Sawada. “A prolonged pandemic remains the primary risk, but recent developments on the vaccine front are tempering this. Safe, effective, and timely vaccine delivery in developing economies will be critical to support the reopening of economies and the recovery of growth in the region", he added.

Pandemic-induced lockdowns and restrictions have been eased in varying levels in the region, with merchandise exports rebounding quickly from substantial declines in the second quarter. Mobility is also returning to pre-Covid-19 levels in East Asia and the Pacific, where the spread of Covid-19 has largely been contained or prevented in recent months. A recovery in tourism, however, is likely to be delayed.

With the pandemic stifling economic activity, Vietnam has set a revised GDP growth target of 2-3 percent this year, down from the 7.02 percent it achieved last year.

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