ADB forecasts Vietnam GDP growth at 2.3 percent in 2020 hinh anh 1ADB forecasts Vietnam GDP growth at 2.3 percent in 2020 - illustrative image (Photo: VietnamPlus)

Hanoi (VNA)
- The Asian Development Bank (ADB) has revised its 2020 GDP forecast for Vietnam from 1.8 percent to 2.3 percent following positive signs in public investment and domestic consumption.

According to the Asian Development Outlook (ADO) 2020 released by the bank on December 10,  Vietnam’s GDP growth pick up from 0.4 percent in the second quarter to 2.6 percent in the third quarter, lifting average growth in the first nine months by 2.1 percent.

ADB experts said the change in the growth forecast from 1.8 to 2.3 percent was prompted by accelerated public investment, revived domestic consumption, trade expansion, and rapid recovery in China.

The bank also revised down Vietnam’s growth forecast next year by 0.2 percentage points to 6.1 percent.

The report also said economic activity in developing Asia is forecast to contract by 0.4 percent this year, an improvement from the -0.7 percent gross domestic product (GDP) growth forecast in September.

ADB’s outlook for 2021 remains unchanged, with the region’s growth projected to pick up to 6.8 percent before picking up to 6.8 percent in 2021 as the region moves toward recovery from the effects of the COVID-19 pandemic

ADB Chief Economist Yasuyuki Sawada said in a statement that "the outlook for developing Asia is showing improvement. Growth projections have been upgraded for China and India, the region's two largest economies".

“A prolonged pandemic remains the primary risk, but recent developments on the vaccine front are tempering this," he said. 

The safe, effective and timely provision of vaccine in developing economies will be a key factor in facilitating the reopening of economies and growth recovery in the region, he added.

Pandemic-induced lockdowns and restrictions have been eased in varying levels in the region, with merchandise exports rebounding quickly from substantial declines in the second quarter.

Travel activities are also returning to pre-pandemic levels in East Asia and the Pacific, while the spread of COVID-19 has largely been contained or prevented in recent months. However, the tourism industry's recovery is likely to be delayed.

Most of developing Asia’s subregions are forecast to contract this year, except for East Asia with an upgraded growth forecast of 1.6 percent on the back of faster-than-expected recoveries in China and Taiwan (China).

The ADB expert said South Asia's GDP is forecast to contract 6.1 percent in 2020, up from the 6.8 percent ontraction projected by the bank in September. The region’s growth outlook for 2021 is at 7.2 percent.

The growth outlook for China and East Asia next year is maintained at 7.7 percent, and 7.0 percent, respectively.

India's forecast GDP growth for fiscal year 2020 is raised to minus 8.0 percent, from the minus 9.0 percent projection in September, while the outlook for fiscal year 2021 is kept at 8.0 percent.

The report said that economic growth in Southeast Asia remains under pressure as COVID-19 outbreaks and containment measures continue, particularly in Indonesia, Malaysia, and the Philippines.

The sub region's growth forecast for 2020 is revised down to minus 4.4 percent from minus 3.8 percent in September. The sub region's outlook for 2021 is also downgraded, with Southeast Asia now expected to grow 5.2 percent next year compared to the 5.5 percent growth forecast in September.

The outlook for the Pacific is unchanged for both 2020 and 2021 at minus 6.1 percent and 1.3 percent, respectively. 

Meanwhile, Central Asia's growth forecast for 2020 remains at minus 2.1 percent, but the outlook for 2021 is slightly downgraded to 3.8 percent from the 3.9 percent growth projection in September. 

Regional inflation is expected to marginally ease to 2.8 percent in 2020, from the 2.9 percent predicted in September, due to depressed demand and low oil prices.

Inflation for 2021 is forecast at 1.9 percent, down from the 2.3 percent forecast in September.

Oil prices are retained at 42.5 USD per barrel in 2020 before increasing to 50 U.S. dollars per barrel in 2021./.