Vietnam’s GDP to grow 2.3 pct: Oxford Economics

By Nguyen Quy   July 16, 2020 | 05:37 am PT
Vietnam’s GDP to grow 2.3 pct: Oxford Economics
Labourers wear protective masks as they work at Ngoc Nu factory in Hanoi, June 1, 2020. Photo by Reuters/Kham.
Vietnam's success in tackling the Covid-19 pandemic will help its economy recover faster than regional peers and grow by 2.3 percent this year, a report says.

Oxford Economics, which specializes in global forecasts and quantitative analysis, said in a report released Wednesday that the Vietnamese economy is expected to make a quicker rebound than most other economies in the region in the second half of the year with its success in containing the pandemic.

The rebound can help Vietnam's GDP grow 8 percent next year, the report said.

It cautioned however that the country remained vulnerable to external developments, particularly those affecting trade, tourism, and FDI.

"Foreign investment can pick up in the second half, with Vietnam's labor dynamics and geographical proximity to China ensuring that it remains an attractive destination for investment, particularly in manufacturing."

Registered FDI topped $15.67 billion in the first half of this year, 15.1 percent down year-on-year, according to the Ministry of Planning and Investment.

However, ongoing restrictions on international travel will continue to hinder tourism, with government efforts to promote domestic travel still unlikely to offset the fall, the report noted.

"With exports accounting for over 80 percent of Vietnam's GDP, the pace of recovery will rely on global trade momentum."

In case the second wave of the Covid-19 pandemic appears with the renewed global lockdown, Vietnam may only achieve 1.5 percent growth this year, Oxford Economics added.

Vietnam’s GDP grew 1.81 percent in the first half of the year, the lowest since 2011, due to the impact of the pandemic, according to government data.

Market research company Fitch Solutions last month revised the country’s GDP growth this year up to 3 percent from its previous forecast of 2.8 percent. The World Bank had earlier predicted the economic expansion could fall to 1.5 percent this year.

Last year, the country's GDP growth hit 7.02 percent, the second highest figure in the last decade, after a record 7.08 percent in 2018.

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