ADB: Viet Nam still remains among fastest-growing economies in SA despite COVID-19

Last year, the economy expanded robustly with expansion underpinned by strong domestic demand, resilient manufacturing, and solid foreign direct investment, making it  a “stellar” year.

However, the spread of COVID-19 and the resulting abrupt global slowdown will slash the nation’s growth to 4.8% in 2020 from 7% last year, said the international institution.

The outbreak spiraled into a new stage in March when it came to affect all of Viet Nam’s major trade and investment partners while the number of COVID-19 infections has continued to climb, thus the impacts could therefore be severe, the ADB predicted.

Services have so far been the sector hardest hit by the outbreak. Considering its 42% share of GDP, a slowdown in services will significantly dent growth.

     >>> Infographic: Socioe-economic performance in Q1/2020

Despite the potentially large impact of COVID-19, Viet Nam’s economic fundamentals remain resilient, the ADB emphasized.

If the outbreak 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 ADB said Viet Nam’s economic growth drivers, such as growing middle-income class and dynamic private sector, remain strong. Especially its middle class is one of the fastest growing in Southeast Asia.

Moreover, disbursement of public investment will continue to improve in 2020 as this is a priority fiscal measure in response to COVID-19.

In addition, a large number of bilateral and multilateral trade agreements in which Viet Nam participates promise the improved market access essential for an economic rebound after the COVID-19./.

By Ngoc Van