GDP could shrink for first time since opening up economy

The Vietnam Institute for Economic and Policy Research (VEPR) said in a report on Monday that GDP could shrink sharply in the second and third quarters before returning to growth in the last quarter.

Vietnam has never recorded negative growth since it opened up its economy in 1986.

Agriculture, forestry and fisheries could record negative growth of 1-5 percent, while restaurant, hospitality and logistics could see a year-on-year decline of 25-70 percent.

The institute also provided two other scenarios. Should the pandemic end in the third quarter, GDP growth for the year could be 1.5 percent.

In the best-case scenario of the pandemic being controlled in the second quarter, growth could be 4.2 percent.

The forecasts came after Vietnam recorded decade low GDP growth of 3.82 percent in the first quarter as the coronavirus outbreak crippled key industries like tourism, hospitality and aviation.

Other organizations have also lowered the growth forecast for Vietnam: Fitch Ratings projects a rate of 3.3 percent, the lowest in three decades, the Asian Development Bank forecast a slowdown to 4.8 percent, still higher than the Asian average of 2.2 percent.

Last year GDP growth hit 7.02 percent, the second highest figure in a decade behind 7.08 percent in 2018.