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The Economist: Vietnam is the 12th strongest economy

10:37 | 07/05/2020

Vietnam is the 12th strongest financially out of 66 emerging economies following the devastation caused by the Covid-19 pandemic, according to The Economist newspaper.

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the economist vietnam is the 12th strongest economy
Vietnam ranked 12th out of 66 emerging economies (Photo: CafeBiz)

Recently, the Economist conducted a survey on 66 emerging economies, ranking the financial capacity of each market according to criteria of public debt, foreign debt, credit costs and foreign exchange reserves. Accordingly, Vietnam ranked 12th out of 66 emerging economies in terms of strong financial system.

Topping the chart is Botswana, South Korea and a number of other economies. At the bottom is Venezuela.

According to the research by Economist, emerging economies currently have up to US$ 17 trillion of public debt, equivalent to 24% of global public debt. About 18 emerging economies were downgraded by Fitch in 2020, a record high, as a result of the Covid-19 epidemic.

More than 100 countries around the world are asking the International Monetary Fund (IMF) for help. Even some economies, such as Egypt, have been regular clients with the IMF after paying off their debts in 2016. The financial institution has quickly passed more than 40 small loans to help cope with the Covid-19 epidemic, cited CafeBiz.

the economist vietnam is the 12th strongest economy
The ranking of 66 emerging countries by the Economist (Photo: CafeBiz)

However, according to the Economist, not every emerging economy is weak in the Covid-19 epidemic. Countries such as Russia, Peru, and the Philippines all have quite strong financial systems to be able to cope with the Covid-19 epidemic even after reopening.

Given the current situation, the Economist believes that emerging economies will have to receive at least US$ 2.5 trillion relief aid, preferential loans or from their own foreign exchange reserves to survive the Covid epidemic.

the economist vietnam is the 12th strongest economy
The Vietnamese economy is relatively strong and stable (Photo: Economy and Urban)

In Southeast Asia, Vietnam stands behind only the Philippines (6th) and Thailand (7th).

The Vietnamese economy is relatively strong and stable and is among the least affected by the Covid-19 crisis, the report by the Economist said.

Vietnam’s public debt stood at 56.1 percent of GDP last year and is set to reduce to 54.3 percent this year, the Ministry of Finance said in a budget report to the National Assembly.

Vietnam lifted its 22-day social distancing campaign from April 23 and the government ordered provinces and cities to reopen their economy at the earliest.

Vietnam saw decade-low GDP growth of 3.8 percent in the first quarter after "non-essential" businesses and tourist destinations were ordered to close, reported by VnExpress.

Last year growth had been 7.02 percent, the second highest rate in a decade.

At a cabinet meeting on Tuesday Prime Minister Nguyen Xuan Phuc called for setting a growth target of above 5 percent for this year and keeping inflation below 4 percent.

The Economist's research of the world economies shows that most emerging but large economies like Korea, Russia, China...easily withstand the consequences of Covid-19 while most small economies do not have enough money to survive.

About 30 countries at the bottom of the rankings have GDP of just 11% of the total GDP of 66 economies.

The Economist said that the Covid-19 pandemic caused losses to emerging economies in three directions: blockade of travel, reduction of export revenue and hindering foreign capital flows. Even if the pandemic declines in the second half of 2020, GDP in developing economies this year will fall 6.6% compared to the forecast of the International Monetary Fund (IMF) launched in October.

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