Vietnam’s 2020 growth forecast at 6.5% amid ‘fragile’ global economic outlook

The prediction for Vietnam in 2020 and 2021 is unchanged from the World Bank’s previous forecast in October, with the Southeast Asian economy set to decelerate from estimated 6.8% in 2019. The Vietnamese government had reported an economic growth last year was 7.02%.

Generally, the global economy is expected to grow by 2.5% in 2020, up from 2.4% in 2019. This is the weakest growth rate since the global financial crisis in 2008-2009, the World Bank said in statement.

U.S. growth is forecast to slow to 1.8% this year, reflecting the negative impact of earlier tariff increases and elevated uncertainty. Euro Area growth is projected to slip to a downwardly revised 1% in 2020 amid weak industrial activity.

A Vietnamese farmer sells cherry blossom during Tet season in Vietnam. Photo: Pixabay.com / Kieu Truong

Growth in East Asia and Pacific region excluding China is projected to ease to 4.9% in 2020, reflecting a further moderate slowdown in China to 5.9%, reflecting the continued impact of trade tensions, despite the phase one agreement between China and the United States.

Recently, analysts from Fitch Solutions said that Vietnam’s GDP growth would reach 6.8% this year, mainly due to a slowdown in the industrial sector.

Earlier, Vietnamese Prime Minister Nguyen Xuan Phuc said the country targets economic growth at about 6.8% this year amid a projected 7% rise in exports. Inflation should stay below 4%.

Vietnam has been benefiting from rising foreign investment in manufacturing as businesses shift production from China to bypass higher tariffs.