Standard Chartered Bank: Vietnam's 2020 economic growth to fall to 3.3 pct.
HCM City (VNA) - Vietnam’s economic growth is forecast to shrink to 3.3 percent
this year due to the impact of a raft of external challenges, according to the
latest economic outlook released by Standard Chartered Bank on April 23.
Vietnam
has now integrated more deeply into the global economy thanks to the strong
development of its manufacturing sector, said economist Chidu Narayanan at
Standard Chartered Bank. The country has one of the most open economies in
Asia, with a trade-to-GDP ratio surging to 300 percent, so it heavily depends on global
demand, he explained.
Given that
the US and European economies are slipping into recession, weakening global
demand will affect Vietnam’s economic growth in 2020.
In the
economic outlook for the second quarter entitled “Darkest before the dawn”, the
bank said the manufacturing sector, which accounts for one-third of the
country’s GDP, is expected to grow only 3 percent this year compared to 11
percent in 2019.
The
sector’s contribution to GDP growth is predicted to fall 1.6 percentage points
from a year earlier.
Growth in
the service sector, meanwhile, which contributes nearly 40 percent of GDP, is expected
to slow down to an estimated 4 percent, compared to 7.3 percent last year. Its
contribution to GDP growth will likely to fall 1 percentage point.
The bank
also said the number of visitors to Vietnam will be down by 60 percent this
year and FDI inflows will be below 10 billion USD or lower if concerns over the
COVID-19 pandemic linger into the second half.
Vietnam’s
GDP grew 3.82 percent in the first quarter - the lowest rate posted for a
decade - due to impact of the pandemic./.