Vietnam’s economy remains resilient despite COVID-19 challenges: ADB

Hanoi (VNA) – 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, according to a new report released by the Asian Development Bank (ADB) on September 15.

The Asian Development Outlook (ADO) 2020 Update, ADB’s annual flagship economic publication, says Vietnam’s economy will benefit from the continued diversion of production from China to Vietnam, and the implementation of the European Union – Vietnam free trade agreement.

According to ADB Country Director for Vietnam Andrew Jeffries, lower domestic consumption and weak global demand caused by COVID-19 have hurt Vietnam’s economy more than expected. But economic growth will be resilient in 2020, in large part due to the government’s success in controlling the spread of COVID-19.

Economic growth will be supported by the country’s macroeconomic stability, increased public spending, and ongoing reforms to improve the business environment, he added.

ADO 2020 Update says Vietnam’s economic outlook over the medium and long term remains positive. The country’s participation in a large number of bilateral and multilateral trade agreements will help the country’s economic rebound.

Vietnam will also likely benefit from the current shifting of supply chains to low-cost countries, it says.  

However, a prolonged global COVID-19 pandemic remains the biggest risk to Vietnam’s growth outlook this year and next year, it notes, adding that another threat is global trade tensions, which lead to rising trade protection and financial risks that could be exacerbated by a prolonged pandemic./.