The Asian Development Bank (ADB) has just released its growth forecast for the year, with Vietnam’s growth revised down to 5.8% from the previous figure of 6.7% put forward in April.
The ADB anticipates that economic growth for developing Asia will stand at 7.2% this year, compared with its forecast of 7.3% made in April. This is due to further COVID-19 outbreaks slowing the recovery in some regional economies, although the growth outlook for 2022 has been upgraded to 5.4% from 5.3%.
According to ADB’s assessment, with the global recovery spurring exports, Vietnamese GDP growth surged to 5.6% during the first half of this year from 1.8% in the same period from last year, this is despite disruption caused by a new wave of COVID-19 which broke out in late April.
Most notably, the relatively slow rollout of the nation’s vaccination programme, along with the enforcement of prolonged social distancing measures in the country's largest growth regions, have had a significant impact on trade exchange and restrict economic activities this year.
“Asia and the Pacific’s recovery from the COVID-19 pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants, and an uneven vaccine rollout,” said Yasuyuki Sawada, chief economist of the ADB.
“On top of containment and vaccination measures, phased and strategic rejuvenation of economic activities, for instance, trade, manufacturing, and tourism will be key to ensure that the recovery is green, inclusive, and resilient,” Sawada concluded.
East Asia’s growth outlook for the remainder of the year has been raised to 7.5% from 7.4% in April amid a stronger-than-expected recovery by the newly industrialised economies, including Hong Kong (China), the Republic of Korea and Taiwan (China). The sub-regional growth forecast for next year remains at 5.1%, whilst the growth outlook for China is maintained at 8.1% for this year and 5.5% in 2022, amid steady performances by industry, exports, and services.
Furthermore, projections for South Asia, Southeast Asia, and the Pacific for this year have been lowered as recent outbreaks are met with containment measures and restrictions, thereby hampering economic activity. Indeed, South Asia’s growth outlook for the fiscal year has been lowered to 8.9% from 9.5%.
The forecast for India has also been downgraded by 1% to 10.0%. In addition, Southeast Asia’s outlook for the year has been revised to 4.0% from 4.4%, while the projection for the Pacific has been lowered to 0.3% from 1.4%. However, the 2022 growth forecasts for these sub regions have been upgraded to 7.0%, 5.2%, and 4.0%, respectively.
Vietnam’s economic growth accelerated to 6.61% y/y in 2Q21, extending from an upwardly revised gain of 4.65% y/y in 1Q21.