A worker operates a yarn processing line at Best Pacific Vietnam Co. Ltd at the Vietnam-Singapore Industrial Park (VSIP) in the northern province of Hai Duong. (Source: VNA) HCM City (VNA) - Vietnam’s economic growth is forecast to shrink to 3.3 percentthis year due to the impact of a raft of external challenges, according to thelatest economic outlook released by Standard Chartered Bank on April 23.
Vietnamhas now integrated more deeply into the global economy thanks to the strongdevelopment of its manufacturing sector, said economist Chidu Narayanan atStandard Chartered Bank. The country has one of the most open economies inAsia, with a trade-to-GDP ratio surging to 300 percent, so it heavily depends on globaldemand, he explained.
Given thatthe US and European economies are slipping into recession, weakening globaldemand will affect Vietnam’s economic growth in 2020.
In theeconomic outlook for the second quarter entitled “Darkest before the dawn”, thebank said the manufacturing sector, which accounts for one-third of thecountry’s GDP, is expected to grow only 3 percent this year compared to 11percent in 2019.
Thesector’s contribution to GDP growth is predicted to fall 1.6 percentage pointsfrom a year earlier.
Growth inthe service sector, meanwhile, which contributes nearly 40 percent of GDP, is expectedto slow down to an estimated 4 percent, compared to 7.3 percent last year. Itscontribution to GDP growth will likely to fall 1 percentage point.
The bankalso said the number of visitors to Vietnam will be down by 60 percent thisyear and FDI inflows will be below 10 billion USD or lower if concerns over theCOVID-19 pandemic linger into the second half.
Vietnam’sGDP grew 3.82 percent in the first quarter - the lowest rate posted for adecade - due to impact of the pandemic./.
