Vietnam’s outlook is one of the brightest in Asia

CNBC | Abigail Ng Wednesday | 07/08/2020 11:06

A woman leaves a cosmetics store in Hanoi, Vietnam on July 6, 2020. Nhac Nguyen | AFP | Getty Images

A rebounding economy and a new trade deal are reasons why the outlook for Vietnam is positive despite the coronavirus pandemic, said UBS Research.

Vietnam is among the “brightest” spots in Asia despite the challenge of trying to contain the coronavirus pandemic — and its economy is poised to rebound, a UBS economist said this week.

“Vietnam is suffering some pain from the impact of Covid-19, but the outlook is looking one of the brightest in the region,” said Edward Teather, Asean economist at UBS Research.

“Retail sales, imports (and) industrial production were all actually up on the year in the month of June, which is better than you can say for most economies in the region,” he told CNBC’s “Squawk Box Asia” on Monday.

Many economies contracted in the second quarter of 2020 compared to a year ago, but Vietnam’s gross domestic product grew slightly at an estimated 0.36%.

The country was successful in containing its coronavirus situation even though it shares a border with China, where the virus outbreak was first reported.

Vietnam has reported 369 cases and no deaths so far, according to data compiled by Johns Hopkins University. The country has for a population of under 100 million.

“Vietnam is growing and is well-positioned to continue to take global market share in terms of exports going forward, so pretty bright prospects in a relative sense in the region,” Teather said.

The nation is seen as an alternative manufacturing hub for companies that want to shift production out of China due to tensions between Beijing and Washington that have resulted in rising tariffs.

► Fitch revises Vietnam’s 2020 GDP to 3% from 2.8% in previous forecast

► Vietnam posts 1.81 percent GDP growth in six months, ten-year low

Source: CNBC