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Vietnam’s economy remains resilient despite pandemic-triggered challenges: ADB

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HCMC – Vietnam’s economy is expected to grow 1.8% this year amid the Covid-19 pandemic and bounce back to 6.3% next year, according to a new Asian Development Bank (ADB) report released today, September 15.

In the Asian Development Outlook 2020 Update, ADB’s annual flagship economic publication, experts stated that the local economy will benefit from the continued diversion of production from China to Vietnam, the recovery in China’s economy and the implementation of a free trade agreement with the European Union.

In addition, slower-than-normal growth would keep inflation subdued at 3.3% this year and 3.5% next year.

Further, Vietnam’s economic outlook over the medium and long term remains positive. The country’s participation in various bilateral and multilateral trade agreements will help its economy rebound. This Southeast Asian nation is also likely to benefit from the current shifting of supply chains to low-cost countries.

Meanwhile, there remain significant risks. A prolonged global health crisis remains the biggest risk to Vietnam’s growth outlook this year and next. Another threat is global trade tension, which results in rising trade protection and financial risks that could be exacerbated by a prolonged pandemic, the report said.

Andrew Jeffries, ADB Country Director for Vietnam, said, “Lower domestic consumption and weak global demand caused by Covid-19 have damaged Vietnam’s economy more than expected. But economic growth will be resilient in 2020, in large part due to the government’s success in controlling the spread of Covid-19.”

He added that economic growth will be supported by the country’s macroeconomic stability, increased public spending and ongoing reforms to improve the business environment.

By Hong Ngan

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