"Vietnam Grows 2.7% This Year, Expected to Rise to 7% Next Year"

Infected 382 People, 0 Deaths... Successful Quarantine Results Including Border Closure

[Asia Economy Hanoi Correspondent Jo Ara] Vietnam's economic growth rate, which avoided the direct impact of the novel coronavirus infection (COVID-19), is expected to rise to 7% next year.

According to local media on the 21st, the International Monetary Fund (IMF) recently gave a positive evaluation of Vietnam's COVID-19 response and forecasted an economic growth rate of 2.7% this year and 7% next year.

Vietnam shares a border with China, the origin of the COVID-19 virus, but has been praised for its successful quarantine measures, with a cumulative total of 382 confirmed cases and zero deaths as of the 19th. This proves that quarantine is ultimately the key to economic growth.

In particular, despite the tourism industry, Vietnam's main sector, being hit by the COVID-19 impact in the second quarter, the economic growth rate increased by 0.4% compared to the same period last year, which is positive in that it achieved positive growth even in the worst situation. Oxford Economics forecasted Vietnam's annual growth rate at 8% next year and predicted that foreign direct investment (FDI) in manufacturing would increase in the second half of this year due to Vietnam's labor force and geographical advantages. They added that exports, which account for more than 80% of Vietnam's gross domestic product (GDP), will depend on the pace of global recovery.

According to the Vietnam General Statistics Office (GSO), domestic industrial production recorded the lowest growth rate in the past 10 years due to the impact of COVID-19. However, it showed signs of recovery from May, and the number of new startups in June reached 13,700, an increase of 27.9% compared to the previous month.

Nguyen Thi Thuong, Deputy Director of the Vietnam General Statistics Office (GSO), said, "It is encouraging that Vietnam's economy continued positive growth despite the impact of COVID-19," and added, "According to the survey of trends in manufacturing and other sectors, production by companies is expected to increase further in the third quarter."