Vietnam's 2020 GDP seen slowing to 4.8% due to coronavirus outbreak, ADB says

However, Vietnam stays among the fastest growing economies despite shock from the worldwide public health crisis.

In the first quarter of this year, Vietnam’s economic growth decelerated to 3.8% from 6.8% of a year earlier due to travel and other restrictions imposed by the government to curb the spread of the virus.

If the pandemic 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 organization said.

“Despite the deceleration in economic activity and the downside risks posed by the COVID-19 pandemic, Vietnam’s economic growth is projected to remain one of the highest in Southeast Asia,” said ADB Country Director for Vietnam Eric Sidgwick.

The country’s growing middle-income class and a dynamic private sector, the drivers of economic growth remain robust while the business environment continues to improve. A large number of bilateral and multilateral free trade agreements Vietnam is participating contribute much to the future economic rebound, the organization commented.

 Before the pandemic happened, the organization raised 2020 economic growth forecast for Vietnam to 6.8% from earlier 6.7%.

ADB sees regional economic growth will decline sharply in 2020 to 2.2%, a downward revision of 3.3 percentage points relative to the 5.5% it had forecast in September 2019.

Growth is expected to rebound to 6.2% in 2021, assuming that the outbreak ends and activity normalizes. Excluding the newly industrialized economies of Hong Kong, China, the Republic of Korea, Singapore is forecast to grow 2.4% this year, compared to 5.7% in 2019, before rebounding to 6.7% next year.

The global cost of the pandemic could range from $2 trillion to $4.1 trillion, equivalent to a loss of between 2.3% to 4.8% of global gross domestic product, ADB estimated.

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