Vietnam reports 2020 economic growth at 2.91% despite pandemic

Despite the growth rate was much lower than 7.02 percent reported in 2019, the Vietnamese government saw this a success as several major economies in the world predicted economic contraction due to the world’s biggest public health crisis in modern time.    

Covid-19 hit key sectors and the Vietnamese economy plunged in 2020, but the government expects to make a strong recovery after the pandemic is controlled effectively.

Before the virus was confirmed, the Southeast Asian economy expected a 6.8 percent GDP growth in 2020, lower than 7 percent achieved in the previous two years.

2020 has been a particularly difficult year for Vietnam with most sectors, especially services and manufacturing, suffering Covid-19 impacts. This has resulted in dwindling GDP growth, economist Le Dang Doanh told VnExpress.

After hundreds of infected cases confirmed during the two outbreaks in March and August, several experts forecast a GDP contraction for the first time in decades.

Although this is the lowest growth rate since 2011, the 2.91 percent growth is a great success Vietnam in the context of Covid-19 pandemic. Vietnam’s 2020 economic growth rate is among the highest in the world, GSO said in a statement.

In the general growth rate of the whole economy, the agriculture, forestry and fishery sector increased by 2.68 percent, contributed 13.5 percent to the growth rate of the total added value of the whole economy.

The industry and construction increased 3.98 percent, contributed 53 percent, and the service sector increased 2.34 percent, contributing 33.5 percent.

Tourism, which had enjoyed double-digit growth in several years, was among the hardest-hit sectors due to the social distancing campaigns and travel restrictions to prevent novel coronavirus.

Foreign arrivals in the 12-month period plunged 78.7 percent percent year-on-year to 3.84 million people.

International visitors to Vietnam in December were estimated at 16,300 arrivals, down 8.1 percent from the previous month and down 99 percent from the same period last year.

In 2020, number of enterprises registering to suspend business, wait for dissolution procedures and complete dissolution procedures rose by 13.9 percent to 101,700 enterprises.

The International Monetary Fund had revised upward its forecast for Vietnam’s 2020 GDP growth to 2.4 percent. The organization said Vietnam’s growth would be among the highest in the world, thanks to its successful containment of the Covid-19 pandemic.

In October report, the IMF had forecast 1.6 percent growth.

In a recent report, World Bank forecast Vietnam’s economic growth at 2.8 percent in 2020 while the world economy is expected to contract 4 percent.

The State Bank of Vietnam reported Saturday that as of December 21, credit expanded 10.14 percent as compared with the end of 2019.

Q4 growth at 4.48%

Gross domestic product in the fourth quarter of 2020 grew 4.48 percent from a year earlier, much higher than an expansion of 2.69 percent in the previous quarter. However, this is the lowest growth rate since 2011, according to data from the General Statistics Office.

The complicated development of the COVID-19 pandemic has left a negative impact on all socio-economic aspects. The latest growth rate was the lowest since quarterly records began in Vietnam 30 years ago, the GSO said.

2020 inflation rate at 3.23%

The country’s consumer prices in the final quarter of 2020 rose 1.38 percent from a year earlier, resulting an average consumer prices in the year rose 3.23 percent from 2019.

The increase in rice price made the consumer price index in December 2020 increase by 0.1 percent over the previous month and by 0.19 percent compared to the same period last year.

The Covid-19 epidemic has been controlled well, the EU and Vietnam Free Trade Agreement was implemented, industrial production in the fourth quarter of 2020 has prospered with the increase in value added.

Vietnam’s industrial output in December rose 9.5 percent from a year earlier. The whole year’s industrial output rose 3.36 percent in compared to 2019. The processing and manufacturing industry increases by 5.82 percent, playing a key role in leading the overall growth of industry and the whole economy, the GSO added.

The Southeast Asian country, which is seeking an economic growth of 6 percent in 2021, has confirmed 1,440 patients of COVID-19 and 35 deaths.

► Vietnam economy to grow 3% in 2020 despite COVID-19 crisis: World Bank

► Vietnam’s 2020 lending growth estimated at 11% and 12% projected for 2021