ADB cuts Vietnam growth forecast on Covid resurgence

By Dat Nguyen July 19, 2021 | 08:31 pm PT

People shop at a supermarket in Ho Chi Minh City on July 11, 2021. Photo by VnExpress/Quynh Tran.

The Asian Development Bank has cut its 2021 growth forecast for Vietnam from 6.7 percent to 5.8 percent as the fourth wave of Covid-19 hampers recovery.

Mobility restrictions drove the Purchasing Managers Index (PMI) down to 44.1 in June, the lowest level since May last year, it said in a report.

Vaccination delays and an extended lockdown in the southern region, the country’s largest growth area, could limit economic activity this year, it added.

But it maintained its forecast for next year at 7 percent.

At 5.8 percent, Vietnam’s growth is set to be the second highest in Southeast Asia behind Singapore’s 6.3 percent.

ADB also cut the growth forecast for the region from 4.4 percent to 4 percent as new Covid-19 outbreaks slow recovery.

"Asia and the Pacific’s recovery from the Covid-19 pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants, and an uneven vaccine rollout," ADB chief economist Yasuyuki Sawada said.

Lender HSBC also recently cut the growth forecast for Vietnam for this year from 6.6 percent to 6.1 percent.

Vietnam’s economy grew at an annualized 5.6 percent in the first half.