Will Vietnam's economy enter a period of "rebound" after the pandemic?

Many international organizations forecast that Vietnam will enter a period of "rebound" after the pandemic when the growth "skyrockets" to 6-7% and exceeds the target set by the National Assembly.

Vietnam's economic growth rates both increased compared to forecasts

Successful implementation of the dual goal helps Vietnam's economy become a rare bright spot on the gloomy map of the world economy in 2020.

2021: Accelerating economic growth - Photo 1.

2020, GDP growth rate Estimated of Vietnam is 2,91%, our country becomes a rare country in ASEAN with positive growth and belongs to the group of economies with the highest growth rate in the world. With the solid foundation of recovery and strict measures to prevent the Covid-19 epidemic, Vietnam's growth prospect in 2021 is forecasted at quite high levels by many international organizations.

Typically, the financial institution Fitch Solutions (has raised its forecast for growth of Vietnam to 8,6%, higher than the rate of 8,2% in the previous report. Strong "post-epidemic in the context of the global economy entering a recovery period on the assumption that vaccines are being deployed worldwide. Fitch Solutions had to revise Vietnam's forecast for economic growth in 2021. When our actual growth exceeded their expectations.

With the same point of view, UOB Bank believes that Vietnam's economy will be quite "optimistic" after the pandemic (Vietnam Economic Growth Report, released in early January 2021). In fact, the economic growth in the fourth quarter of 2020 reached 4,48% over the previous year, exceeding their previous prediction of 4%; GDP growth of 2,91% for the whole year 2020 is also higher than the projected 2,7% and the country becomes one of the very few global economies to achieve positive growth in the year when the Covid epidemic. -19 spread all over the world.

Similarly, report Update macroeconomic situation of Vietnam announced by the World Bank in December 12, Vietnam's 2020 economic growth remained high with 2021%. Meanwhile, ADB thinks that Vietnam's growth will reach 6,8%.

At the end of the online consultation session from October 15 to November 10 with Vietnam, Ms. Era Dabla Norris, Head of the delegation of Article IV of the IMF's Asia-Pacific Department, said that Vietnam's economy will recover in the year. 13 with GDP at 11%, inflation at 2021%. 

Despite their different growth forecasts, these organizations share their views on the factors contributing to Vietnam's growth in the coming year. It is the movement of the world trade and investment flows, the recovery of the manufacturing and processing industries and the fiscal and monetary policies enacted in response to the crisis ...

Supporting factors

According to UOB, although foreign direct investment into Vietnam decreased 25% to 28,5 billion USD due to limited travel and investor sentiment was affected, foreign enterprises continued to injecting USD 6,4 billion into existing FDI projects, equivalent to an increase of 10,6% compared to the previous year. This promises positive growth prospects in the future.

Fitch Solutions believes that one of the important factors supporting Vietnam's growth comes from the opportunity to sign trade agreements. Specifically, thanks to the positive impact of free trade agreements such as EVFTA, UKVFTA and RCEP, industrial production and construction, which account for 33,7% of GDP by 2020, will continue to drive growth. growth in 2021.

Besides, the recovery of the global economy and the tendency to diversify the supply chain out of China will help increase demand, increase exports for Vietnamese exports. 

With the same point of view, the World Bank believes that the processing and manufacturing activities will flourish more when the US and EU economies recover, becoming the driving force for increasing demand for Vietnam's exports. The recovery process is also enhanced by newly ratified regional agreements and a projected synergy between multinationals and domestic firms.

In particular, with the national brand value increasing by 29%, the strongest increase in the world in 2020, going against the global downward trend due to the Covid-19 pandemic, Vietnam emerged as "paradise". new production in Southeast Asia.

Vaccine is the "medicine" that can make assumptions come true

Although Vietnam's growth prospects are quite positive, these forecasts are closely tied to the assumption that "depends a lot on global epidemic control as well as on the introduction of vaccines in national contexts." is facing more serious infections as well as the emergence of new virus strains that spread more strongly ”.

TS. Jacques Morisset, chief economist of the World Bank, said that Vietnam's economy is likely to be recovered, it does not mean it will not be affected. “With the rapid spread of the new virus strain and the seriousness in a number of countries, Covid-19 will be a global priority. In particular, the vaccine is the most powerful and effective "medicine" to contribute to solving the bottlenecks of the economy. In an economy like Vietnam, when the world is better, the Vietnamese economy will certainly be better. However, there are also many challenges waiting for Vietnam ahead.

That is, Vietnam still has the problems of an economy with an input-based growth model, not having growth in depth. Especially as Vietnam is focusing on policies to respond to Covid-19, resources to be able to deal with other problems will be limited and difficult. Moreover, the challenges that Vietnam is facing in the coming time require that Vietnam should have stronger and more drastic policies and mechanisms to create a resilience for the economy. Should not be subjective on small achievements, but need to focus on stimulating synchronous development all three growth drivers that are investment, export and consumption.

UOB added that although Vietnam has agreed to buy 30 million doses of anti-Covid-19 vaccine from AstraZeneca, according to Deputy Health Minister Truong Quoc Cuong on January 4, to strengthen the national capacity. In the control of disease in the country, but Vietnam needs a certain time to implement this plan due to limitations related to supply, difficulty in transportation, as well as infrastructure of the health sector. in water.