Vietnam’s economy to expand 3.8 pct: think tank

By Dat Nguyen   July 22, 2020 | 05:20 am PT
Vietnam’s economy to expand 3.8 pct: think tank
Workers make garment products at a factory in the southern Long An Province. Photo by VnExpress/Quynh Tran.
Vietnam’s economy could reach 3.8 percent growth this year if there would be no community transmission in the country in the remaining months, a think tank said.

The Vietnam Institute for Economic and Policy Research (VEPR) made its forecast based on the scenario that domestic economic activities would gradually resume normality.

This growth rate would be the lowest since 1987 when the country first opened its economy to the world after decades of war, according to World Bank data.

Vietnam will still be impacted by the ongoing Covid-19 situation in other countries, which could result in continued lockdown in the third quarter, VEPR said.

Agriculture, fisheries and manufacturing exports would therefore continue to be hurt in the second half, it added.

Vietnam’s decade-long period of export growth ended in the first half of this year when the coronavirus caused trade to contract by 1.1 percent to $121.2 billion, with smartphones, textiles and garments, footwear, seafood, and fruit exports all decreasing.

Textile and garment, alongside wood and seafood exporters have all implemented job cuts due to plummeting orders caused by the pandemic.

If lockdown in other countries persist until the fourth quarter, there would be no chance for Vietnam’s exports to recover while the lack of foreign tourists hinder tourism growth, VEPR said, adding this would put Vietnam’s GDP growth at 2.2 percent.

In the first six months, Vietnam’s GDP growth was roughly 1.81 percent, the lowest since 2011.

U.K.-based analyzing firm Oxford Economics had earlier forecast Vietnam’s GDP growth rate for this year at 2.3 percent, while U.S.-based market research firm Fitch Solutions predicted 3 percent.

World Bank had that growth fall to 1.5 percent this year, against 7.02 percent in 2019.

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