Vietnam's GDP expected to grow 2.8 pct in 2020 with improved situation

July 31, 2020

If the world situation gradually improves, Vietnam's economic activity should rebound in the second half of 2020, leading to a growth of 2.8 percent this year and 6.8 percent in 2021, the World Bank forecast in a report released Thursday.

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 in its latest bi-annual economic report on Vietnam, noting that the main challenge facing the country will be finding new drivers of growth to consolidate the expected recovery.

According to the report, foreign demand and private consumption, the country's traditional sources of growth, are unlikely to return to their pre-crisis levels soon amid continued uncertainties in home and abroad.

"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," Stefanie Stallmeister, World Bank Acting Country Director for Vietnam, commented in a press release on Thursday.

The report also suggests complementary measures for the country to avoid the COVID-19 economic trap and return to its historical trajectory of rapid and inclusive growth, including gradually and carefully removing mobility restrictions on international travel, accelerating the execution of existing public investment program to enhance domestic demand, and providing targeted support to the private sector, particularly to the hardest-hit industries such as tourism and manufacturing exports.

Vietnam posted economic growth of 1.81 percent in the first half of this year, the lowest six-month growth rate in the 2011-2020 period, according to its General Statistics Office.