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[FORECAST] COVID-19 impact Viet Nam’s economic growth – ADB

[FORECAST] COVID-19 impact Viet Nam’s economic growth – ADB

Vietnam’s economic growth rate is expected to slow to 4.8% this year due to the impact of the COVID-19 pandemic, a new report of the Asian Development Bank (ADB) released. on Thursday.

The report shows that the country will suffer a continuous decline in demand from major trading and investment partners.

Economic growth decelerated to 3.8% in the first quarter of 2020, compared to 6.8% in the same period last year. Tourism and other restrictions imposed by the Government to slow the spread of the virus led to lower domestic consumption. Production has weathered the early monsoon winds but inputs, including parts of the global value chain, are running out.

Growth in agriculture has stalled due to lower demand for agricultural exports and severe saline intrusion in the Mekong Delta.

Service growth, the sector most affected by the pandemic, halved to 3.2% in the first quarter of this year, down from 6.5% in the corresponding period in 2019, the report said. know.

Inflation drops to a 3-year low in 2019 but is expected to moderate in 2020 and 2021. The current account surplus is expanding in 2019 but will sign a strong contract this year.

According to ADB experts, to support economic activities, in early March, the Government announced a credit relief package worth 10.8 billion USD to restructure debts and reduce interest rates and fees. The government also offers a $ 1.3 billion financing package to reduce taxes and fees for affected companies and delay payment of taxes.
To support economic activities, in early March, the government announced a US $ 10.8 billion (US $ 0.4% of gross domestic product) credit bailout package to support debt restructuring and reduce interest rates. rates and fees. The government also offers a $ 1.3 billion financing package to reduce taxes and fees for affected companies and delay tax payments, and financial support is expected to increase. The central bank also cut policy interest rates from 0.5 to 1 percent, reducing the ceiling interest rates for dong deposits of less than six months, and short-term VND loans for priority areas.

Meanwhile, the central bank has cut the policy interest rate from 0.5 to 1%, reducing the ceiling interest rate for dong deposits of less than 6 months and short-term loans for priority areas.

According to ADB’s annual economic publication on the prospects for Asian development in 2020, Vietnam’s economy is basically resilient. If the pandemic is included in the first half of 2020, growth will rebound to 6.8 percent by 2021 – The ADB’s COVID-19 forecast for Vietnam in 2020 – and remain strong in the medium to long term. .

Despite the slowdown in economic activity and therefore the adverse risks caused by the COVID-19 pandemic, Vietnam’s economic process is predicted to stay one among the very best in Southeast Asia .

 

covid 19 impact vietnams gdp
According to the latest ADB report released yesterday (March 6), Vietnam is forecast to maintain losses of about 0.41% of GDP, much better than other developing economies such as Taipei. (0.44%), Singapore (0.57), Mongolia (0.74), PRC (0.76), Hong Kong (0.85), Thailand (1.11), Cambodia (1.59) ) and Maldives (2.05).

The fundamentals of the economy remain stable, Asian Development Outlook (ADO) 2020. If a pandemic is included in the first half of 2020, growth will increase. back 6.8 percent in 2021 – the COVID of ADB -19 forecasts for Vietnam by 2020 – and remains strong in the medium and long term.

The momentum of economic growth – the growing middle class and the active private sector – remains strong. The country’s business environment continues to improve. Public spending to counter the impact of the pandemic, which increased significantly in January and February, is likely to be further increased.

Factors driving economic growth such as a growing middle class and a dynamic private sector remain strong. The country’s business environment continues to improve, while public spending to counter the impact of a pandemic may be further enhanced.

The large number of bilateral and multilateral trade agreements that Vietnam participates in, promising to improve market access, will help the country recover economically. Vietnam will also benefit from the containment of a pandemic and the final return of China’s economic growth, which will help revive the global value chain.

Source: VNA & VIR

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