The Vietnamese economy may decelerate significantly this year due to impacts of the COVID-19 pandemic but economic growth is projected to remain of one the highest in the region, according to the Asian Development Bank.
Last year, the economy expanded robustly with expansion underpinned by strong domestic demand, resilient manufacturing, and solid foreign direct investment.
However, the spread of COVID-19 and the resulting abrupt global slowdown will slash the nation’s growth to 4.8% in 2020 from 7% last year, said the international institution.
The outbreak spiraled into a new stage in March when it came to affect all of Vietnam's major trade and investment partners while the number of COVID-19 infections has continued to climb, thus the impacts could therefore be severe, the ADB predicted.
Despite the potentially large impact of COVID-19, Vietnam’s economic fundamentals remain resilient, the ADB emphasized.
If the outbreak is contained within the first half of 2020, growth should rebound to 6.8% in 2021 and remain strong over the medium and long term.
The ADB said Vietnam’s economic growth drivers, such as growing middle-income class and dynamic private sector, remain strong. Especially its middle class is one of the fastest growing in Southeast Asia.
Moreover, disbursement of public investment will continue to improve in 2020 as this is a priority fiscal measure in response to COVID-19.
In addition, many bilateral and multilateral trade agreements in which Vietnam participates promise the improved market access essential for an economic rebound after the COVID-19./.
