GDP forecast to grow 3.8 percent this year

Vietnam’s economic growth in 2020 will reach 3.8 percent if there is no second wave of COVID-19 in the second half of the year and economic activities are being gradually resumed. The forecast was released by the Vietnam Institute for Economic and Policy Research in Hanoi on July 21 at the launch of its independent assessment of Vietnam’s macroeconomic performance.



The institute provided two scenarios for the economy. In the first, the pandemic is assumed capable of recurring in many important economic and financial centres around the world, and confidence is so low that countries extend lockdowns into the second half of the third quarter.

This would affect demand for Vietnam’s imports and hit tourism and accommodation in the country.

If COVID-19 recurs strongly in major economic and financial centres around the world, Vietnam’s import and export activities would be seriously affected and would not be able to recover this year, leading to weak growth in domestic production.

At the same time, in this second scenario, accommodation and catering services have no means of recovering due to the absence of foreign tourists, while domestic demand for these services is limited by the poor economic situation, leading to a GDP growth forecast of 2.2 percent.

Vietnam is one of only a few countries to have posted economic growth in the second quarter of 2020, of 0.36 percent. GDP increased 1.81 percent in the first half.

Experts said that Vietnam’s economic prospects in 2020 will greatly depend on the control of the disease, not only domestically but also globally.

Factors supporting growth in the second half include expectations over economic prospects due to the signing of the EVFTA, disbursement in public investment projects, investment waves coming into Vietnam, and a stable macroeconomy./.