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IMF: Vietnam GDP to grow at 7% next year

17:15 | 11/05/2020

Vietnam’s economic growth is projected to slow down to 2.7% this year due to the novel coronavirus pandemic this year, but may pick up to 7% next year, the International Monetary Fund (IMF) said on May 11.

imf vietnam gdp to grow at 7 next year Vietnam aims at GDP growth of over 5% in 2020
imf vietnam gdp to grow at 7 next year Vietnam aims its goal 7 pct GDP growth next five years
imf vietnam gdp to grow at 7 next year Public investment serves as a key factor for GDP growth

 

imf vietnam gdp to grow at 7 next year
Vietnam's growth is forecasted to reach 7% next year (Photo: VnExpress)

Vietnam’s economic growth is seen slowing down to 2.7% this year due to the coronavirus pandemic, but may pick up to 7% next year, the International Monetary Fund (IMF) said on Monday.

The Southeast Asian country’s strict measures to contain the virus, the global recession and weak domestic demand are expected to slow its economic growth this year from an average of about 7% in 2018 and 2019, the IMF representative in Vietnam, Francois Painchaud, said.

“Some sectors are expected to be severely impacted, especially the tourism, transportation, and accommodation industries,” he told Reuters in an emailed statement.

imf vietnam gdp to grow at 7 next year
IMF forecasts Vietnam's inflation rate to be 3.2% (Photo: Vietnam Economic News)

He said growth is expected to recover as containment measures are lifted, reaching 7% in 2021, supported by monetary and fiscal easing, Vietnam’s relatively strong macroeconomic fundamentals, and a gradual recovery in external demand, cited Reuters.

In its "World Economic Outlook" report released in April, IMF said Vietnam’s inflation rate is forecast to be 3.2 percent, lower than the 4 percent target set for the year.

The government targets annual GDP growth of 7 percent from 2021 to 2025 to make up for the slowdown caused by the Covid-19 pandemic.

imf vietnam gdp to grow at 7 next year
The World Bank had earlier this month forecast Vietnam to grow at 4.9 percent this year (Photo: Bizlive)

In the country’s neighborhood, the Philippines and Indonesia are expected to grow at 0.6 percent and 0.5 percent this year while Thailand and Malaysia are bracing for a contraction.

"Assuming the pandemic fades in the second half of 2020 and that policy actions taken around the world are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains, we project global growth in 2021 to rebound," said Gita Gopinath, the IMF’s economic counselor and director of the research department. 

The World Bank had earlier this month forecast Vietnam to grow at 4.9 percent this year while market research firm Fitch Solutions estimated it at 2.8 percent.

Vietnam recorded a decade-low GDP rate of 3.8 percent in the first quarter after non-essential businesses and tourist destinations were ordered to close. 

Last year GDP growth was 7.02 percent, the second highest in a decade behind the 7.08 percent in 2018, cited VnExpress. 

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Candy Lee

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