HCMC – The Vietnam Institute for Economic and Policy Research (VEPR) announced three economic scenarios for Vietnam for 2020 based on various potential coronavirus situations at a web meeting yesterday, April 13.
If the pandemic can be brought under control by mid-May and countries around the world begin to relax lockdown and preventive measures, economic activities, especially in the service sector, will gradually recover by the end of the second quarter of 2020.
In the second scenario, Vietnam will contain the pandemic in the second half of the third quarter, while Covid-19 continues to rage in the world’s economic hubs and social distancing continues to be applied globally. In this case, economic activities will begin to return to normal at the end of the third quarter of 2020.
If the pandemic lasts until the second half of the fourth quarter, economic activities will not recover until the second half of 2021, according to VEPR.
Data from the General Statistics Office of Vietnam showed that the country’s gross domestic product (GDP) growth in the first quarter of this year reached 3.82%.
However, Assoc. Prof. Dr Pham The Anh, economic expert at VEPR, noted that GDP growth cannot fully reflect the difficulties facing the economy.
Anh suggested the Government prioritize socioeconomic stability policies, create the best conditions for businesses that are continuing to operate and boost public investment while saving at least 10% on regular expenditure.
Over the long term, Vietnam should diversify its export markets to reduce dependence on the European Union, the United States, Japan and China and build fiscal buffers to improve resilience in case of future outbreaks.
Speaking at the meeting, Dr Nguyen Duc Thanh, former director of VEPR, stated that the Government should avoid sudden policy changes that cause trouble for businesses. He took the recent sudden changes to the rice export policy as an example.
According to Dr Nguyen Tri Hieu, a financial and banking expert, if the coronavirus pandemic cannot be brought under control by the end of June, Vietnam will likely post negative economic growth for the first time in several decades.
“The bad debt ratio could rise to over 20%. We hope for the best, but we have to prepare for the worst,” Hieu said.