Oxford Economics forecast Vietnam's GDP to grow 8% in 2021

In a report published on July 14, Oxford Economics forecast that Vietnam's economy will recover in the second half of 2020. The country's annual growth may reach 2.3% this year. Entering 2021, Vietnam's economy can achieve the growth up to 8%. 
July 17, 2020 | 14:00
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Oxford Economics forecast Vietnam's economy will recover in the second half of 2020 (Photo: Security Economy)

In its latest report published on July 14, Oxford Economics said that Vietnam's economy will recover in the second half of this year. Specifically, Vietnam's GDP in 2020 will grow 2.3%. In 2021, it can reach 8%, according to VOV.

However, the recovery will be easily affected by factors affecting trade, tourism and foreign direct investment. Sian Fenner, an economist from Oxford Economics, said that: "Whilst encouraging, we remain cautious in our outlook for momentum, following the initial bounce-back post lockdowns. Indeed, part of the recent rebound in retail sales reflects the release of pent-up demand."

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Vietnam has been considered a bright spot in ASEAN (Photo: Dan Viet)

Foreign direct investment into Vietnam is expected to increase again in the second quarter of 2020 due to the abundance of labor resources and the proximity of Vietnam to China. Therefore, Vietnam remains an attractive destination for foreign investors, especially in manufacturing, International News reported.

Vietnam has been considered a bright spot in ASEAN by investors thanks to its political stability, sustainable economic growth, abundant workforce, large market, increasing per capita income, intensive international integration, competitive incentives, plus its geographical location in the center of Southeast Asia.

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Foreign direct investment into Vietnam is expected to increase again (Photo: VTV)

However, the current travel restrictions will continue to curb the growth of tourism. In this context, Vietnamese government is trying to expand domestic tourism, but this effort is still unlikely to compensate for the decline in international tourism. Moreover, because exports contribute to 80% of Vietnam's GDP, the economic recovery rate also depends on the recovery of global trade.

In addition, a primary risk for Vietnam is the second wave of Covid-19 infection and the global risk is once again blockaded. In this context, Vietnam's growth in 2020 may reach only 1.5% and in 2021, will be 7.8%, informed VTV.

Oxford Economics is a leader in global forecasting and quantitative analysis. Oxford Economics' client base comprises more than 1,500 international corporations, financial institutions, government organisations, and universities.

Oxford Economics is headquartered in Oxford, with offices around the world. It currently employs 400 staffs, including 250 economists and analysts. Its global economic and industry models and analytical tools help forecast external market trends and assess economic, business and social impact.

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