ADB forecasts Vietnam’s economic growth at 1.8 percent in 2020 hinh anh 1The Thang Long Industrial Park in Hanoi (Illustrative photo: VNA)
Hanoi (VNA) – Vietnam’s economy is forecast to expand 1.8 percent in 2020 amid the coronavirus and bounce back in next year, while economies across developing Asia will contract this year for the first time in nearly six decades but recovery will resume next year, according to a recent report released by the Asian Development Bank (ADB).

ADB economic expert Nguyen Minh Cuong said that Vietnam’s economy is expected to grow 1.8 percent in 2020 amid the COVID-19 pandemic and bounce back to 6.3 percent in 2021.

Lower domestic consumption and weak global demand caused by COVID-19 have hurt Vietnam’s economy more than expected, he said.

However, according to Cuong, the country is recovering faster than most of similar economies in the region, thanks to benefits from the involvement in bilateral and multilateral trade agreements.

In addition, positive signals of global trade, investment and production trends will influence the Vietnamese economy in the near future, Cuong said.

The Asian Development Outlook (ADO) 2020 Update forecasts -0.7 percent gross domestic product (GDP) growth for developing Asia this year, marking its first negative economic growth since the early 1960s. Growth will rally to 6.8 percent in 2021, it says.

About three-quarters of the region’s economies are expected to post negative growth in 2020.

The inflation forecast for developing Asia is revised downwards to 2.9 percent this year from 3.2 percent forecast in April, due to continued low oil prices and weak demand.

Inflation for 2021 is expected to ease further to 2.3 percent.

Most economies in the Asia and Pacific region can expect a difficult growth path for the rest of 2020, said ADB Chief Economist Yasuyuki Sawada.

The economic threat posed by the COVID-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures, he noted.

He went on to say that consistent and coordinated steps to address the pandemic, with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable, and ensuring the safe return to work and restart of business activities, will continue to be crucial to ensure the region’s eventual recovery is inclusive and sustainable.

To mitigate the risk, governments in the region have delivered wide-ranging policy responses, including policy support packages — mainly income support — amounting to 3.6 trillion USD, equivalent to about 15 percent of regional GDP.

China is one of the few economies in the region bucking the downturn. It is expected to grow by 1.8 percent this year and 7.7 percent in 2021, with successful public health measures providing a platform for growth.

In India, where lockdowns have stalled consumer and business spending, GDP contracted by a record 23.9 percent in the first quarter of its fiscal year (FY) and is forecast to shrink 9 percent in FY2020 before recovering by 8 percent in the next one.

Sub-regions of developing Asia are expected to post negative growth this year, except East Asia which is forecast to expand by 1.3 percent and recover strongly to 7 percent in 2021.

Some economies heavily reliant on trade and tourism, particularly in the Pacific and South Asia, face double-digit contractions this year. Forecasts suggest that most of developing Asia will recover next year, except for some economies in the Pacific including the Cook Islands, the Federated States of Micronesia, the Marshall Islands, Palau, Samoa, and Tonga./.