Estimates of Vietnam’s economic growth for 2020 is at 3% for 2020. Financial growth estimates indicate a 7.8% growth in 2021. These estimates are according to Standard Chartered’s report named “Vietnam-Q3 disruption, but recovery remains intact”.
Rising consumption on improving sentiment, and faster manufacturing will drive growth in the fourth quarter this year, Standard Chartered noted.
Details on Growth
Chidu Narayanan, the economist behind the report from Standard Chartered Bank, praised Vietnam in his statement. “Vietnam is one of the few Asian economies to have registered positive growth this year”, said Chidu Narayanan. “This despite the second wave of infections”, he added. He expects that improving services growth and infrastructure investment should help Viet Nam outperform the rest of Asia.
The report shows that both exports and imports will increase as a result. Trade is likely to remain in surplus for the rest of 2020 as exports and imports move in tandem.
Construction activity will improve in Q4, supported by increased public infrastructure investment.
Private consumption, accounting for nearly 68% of GDP, should grow strongly in Q4 on improving domestic sentiment. Private investment, however, is likely to remain subdued on lingering uncertainty about medium-term demand.
Standard Chartered’s economists forecasted that newly registered FDI inflows into Vietnam will decline in 2020, but remain strong at close to US$13 billion.
The report also supposed that the Vietnamese central bank would remain accommodative in the near term to support growth. The central bank cut the policy rate by a further 50bps to a historical low of 4% on October 1. The central bank’s 200bps of rate cuts in the year to date and the reopening of the economy should aid further credit growth in the near term.
In conclusion, the report states that Vietnam looks to surpass many other Asian nations in terms of economic growth for both 2020 and 2021.
To find out more on the report, visit the link here.