International Finance

Vietnam’s economy to grow by 2.8% despite Covid-19: World Bank

Vietnam economy

Vietnam’s economy will rebound in the second half of this year despite the Covid-19 crisis, which will result in a gross domestic product (GDP) growth of 2.8 percent this year, according to a report by the World Bank.

The report titled “What will be the new normal for Vietnam? The economic impact of Covid-19”, forecasts that Vietnam’s economy will grow by 6.8 percent in 2021.

The forecasts are made after taking into consideration that the global situation gradually improves. However, with less favorable external conditions, Vietnam’s economy will expand by only 1.5 percent in 2020 and 4.5 percent in 2021, the World Bank said.

Stefanie Stallmeister, World Bank Acting Country Director for Vietnam said in a press release, “To adapt to the new normal, policymakers must find new ways to compensate for the weakening of the traditional drivers of growth while managing rising inequality. However, by being ahead of the curve of the Covid-19 crisis, Vietnam has the unique opportunity to increase its footprint on the global economy and become a leader in tomorrow’s digital world.”

According to the Vietnam Institute for Economic and Policy Research (VEPR), 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.

The growth would be the lowest ever recorded by Vietnam since 1987, when it first opened its economy to the world.

During the first half of 2020, the Covid-19 pandemic caused trade to contract by 1.1 percent to $121.2 billion, with smartphones, textiles and garments, footwear, seafood, and fruit exports all decreasing.

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