ADB revises up Vietnam’s 2020 GDP growth forecast to 2.3%

Containers are stockpiled at the Saigon Premier Container Terminal in HCMC. ADB has slightly upgraded Vietnam’s 2020 economic growth – PHOTO: ANH QUAN

The Asian Development Bank (ADB) has revised up Vietnam’s gross domestic product (GDP) growth forecast in 2020 to 2.3% from the previous estimate of 1.8% in September, attributing the upgrade to the strength of accelerated public investment, revived domestic consumption, trade expansion and rapid recovery in China.

According to the Asian Development Outlook 2020 Update released by ADB today, December 10, this growth rate would be the highest in Southeast Asia and is expected to bounce back to 6.1% in 2021.

Vietnam’s economic growth accelerated from 0.4% in the second quarter of this year to 2.6% in the third quarter, pushing up the average growth in the January-September period to 2.1%. The inflation forecast for the country has been revised up to 3.5% as floods in the central region may exert pressure on food prices.

In Southeast Asia, economic growth remains under pressure as Covid-19 outbreaks and containment measures continue. The GDP forecast for the region has been revised down from a 3.8% contraction in the previous estimate to 4.4% in 2020, and from a 5.5% growth to 5.2% in 2021.

GDP forecasts in 2020 have been downgraded for Indonesia, Malaysia and the Philippines as Covid-19 containment hampers economic recovery. Meanwhile, success in reopening economies points to better growth prospects for Brunei, Thailand and Vietnam. Forecasts remain unchanged for Cambodia, Laos, Myanmar, Singapore and Timor-Leste.

Economic activity in developing Asia is forecast to contract by 0.4% this year, before picking up to 6.8% in 2021 as the region moves toward recovery from the effects of the Covid-19 pandemic.

“A prolonged pandemic remains the primary risk, but recent developments on the vaccine front are tempering this. The safe, effective and timely delivery of vaccines in developing economies will be critical to support the reopening of economies and the recovery of growth in the region,” noted ADB chief economist Yasuyuki Sawada.

Pandemic-induced lockdowns and restrictions have been eased in varying levels in the region, with merchandise exports rebounding quickly from substantial declines in the second quarter. However, a recovery in tourism is likely to be delayed.