Along with Singapore, Vietnam is expected to lead new cycle

Vietnam's economic growth outlook remains optimistic and the economy is forecast to recover to pre-Covid-19 levels in the second half of 2021.

The Institute of Chartered Accountants of England and Wales (ICAEW) and Oxford Economics have released the latest Southeast Asia Economic Outlook. Despite the new outbreak of Covid-19, Vietnam's growth prospects are still optimistic and the economy is forecast to recover to the pre-Covid-19 level in the second half of 2021.

Vietnam's GDP is forecast to increase to 7.6% in 2021, the highest in the region.

According to the report, Vietnam was one of the few economies in the world that still grew in 2020 thanks to its success in fighting the epidemic. This helped the economy benefit from an increase in global business activity and strong foreign investment (FDI), thereby boosting manufacturing industries and export.

Singapore and Vietnam are expected to continue to lead the economic recovery in the region. Although the return of Covid-19 cases in Vietnam is affecting manufacturing industries and exports, the economy is forecast to grow rapidly once restrictions are lifted.

Similarly, Singapore's success in deploying mass vaccinations has contributed greatly to its optimistic outlook. It is the only country in the region that may achieve community immunity by the end of 2021. Singapore's GDP is estimated to grow 6.4% after a 5.4% decline in 2020.

According to ICAEW, Southeast Asia's GDP will increase sharply to 4.8% in 2021 after falling 4.1% in 2020. This growth is thanks to an improvement in global business activities, moderated macroeconomics, continued support from the government budget, and low interest rates throughout the region.

Growth is forecast to reach 6.5% in 2022 as countries gradually reach the threshold of herd immunity. The recovery will be more uniform across all economic sectors.

Southeast Asian economies will continue to see varying rates of recovery in 2021, led by countries' ability to contain the new wave of Covid-19 infections and their success in the purchase and distribution of vaccines.

Uncertainty is still there because the extent of a recovery depends on the progress of vaccinations and the possibility of blockade in the short term. However, the Economic Outlook Report remains optimistic about the prospect of a recovery throughout Southeast Asia in the medium and long term.

Vietnam's economy is expected to recover strongly.

Economic growth and vaccinations

Cùng Singapore, Việt Nam kỳ vọng dẫn đầu chu kỳ mới
 

It is also forecast that most Southeast Asian economies will recover quickly in the second half of 2021.

The GDP growth of most economies in the region in the second quarter is expected to be weaker than in the first quarter, as stricter restrictions have affected sensitive industries negatively affected by social distancing or reduced household consumption.

Despite many challenges, macroeconomic policies and an increase in business around the world have helped most of Southeast Asia to achieve impressive GDP growth this year.

The easing of restrictions in May and July in most countries will spur economic improvement in the second half of this year. Apart from the Philippines and Thailand, most Southeast Asian economies expect to resume to a pre-Covid-19 growth rate this year, with Singapore and Malaysia to witness GDP growth rate between 2% and 2.5%, higher than the pre-Covid-19 levels.

The recent lockdowns in Singapore, Vietnam and Malaysia may make household consumption decrease in the second quarter of 2021. However, the decrease will not be too much because households and businesses are equipped with digital solutions to increase their ability to work and shop remotely. Governments are also resorting to more targeted measures than nationwide lockdowns to minimize production disruptions.

The Singapore government has introduced additional financial support. In addition, export-oriented industries such as electronics manufacturing, semiconductors and pharmaceuticals are expected to contribute to growth in the third quarter and beyond, thanks to a strong global recovery.

The managing director international at ICAEW, Mark Billington, said that while all Southeast Asian economies experienced an increase in Covid-19 cases from the beginning of 2021, leading to implementation of social distancing, this has weakened but not prevented the economic recovery capacity of the entire region.

According to Billington, countries' determination and speed of vaccinations will continue to be an important measure of growth in the second half of 2021.

The uncertainties affecting post-pandemic recovery are still there, such as the effectiveness of vaccines in preventing the spread of new coronavirus variants, public apprehension, and the return of inflation, all slowing down GDP growth.

Concerns about inflation will increase in the next few months across the region. Inflation in the Philippines is expected to remain high at 4% for the entire year, while inflation in Malaysia is already at 3.4%.

V. Ha

Vietnam's post-pandemic economy

Vietnam's post-pandemic economy

As the Covid-19 pandemic persists, Vietnam's economy will still face many difficulties, but the country has the potential to increase productivity and develop at a higher rate than many other countries.

 
 

Other News

.
Four lockdowns within 18 months have hit businesses hard
Four lockdowns within 18 months have hit businesses hard
FEATUREicon  11/06/2021 

In the last 18 months, lockdowns and social distancing have been imposed on four occasions. As a result, many enterprises have had to reinvest or restart business because of disrupted production chains during the social distancing periods.

VIETNAM BUSINESS NEWS JUNE 10
VIETNAM BUSINESS NEWS JUNE 10
BUSINESSicon  10/06/2021 

Vietnam to see export growth as global demand recovers

Domestic funds report impressive growth
Domestic funds report impressive growth
BUSINESSicon  10/06/2021 

The total value of assets under the management of domestic exchange-traded funds (ETFs) has soared by 64 percent to 1 billion USD so far this year, while foreign ETFs increased 12 percent to 1.4 billion USD.

Gov’t responds swiftly to COVID-19 economic impacts: ADB official
Gov’t responds swiftly to COVID-19 economic impacts: ADB official
BUSINESSicon  10/06/2021 

The Vietnamese Government has responded swiftly to the COVID-19 economic impacts, which was supported by strong fundamentals, thus ensuring the economy’s resilience, said Asian Development Bank (ADB) Country Director for Vietnam Andrew Jeffries.

More than 1,100 workers stopped working due to F1 case in Pouyuen Vietnam
More than 1,100 workers stopped working due to F1 case in Pouyuen Vietnam
BUSINESSicon  10/06/2021 

The F1 case at Pouyuen Vietnam Co., Ltd. (Pouyuen Vietnam), located in Tan Tao Ward, Binh Tan District, has caused more than 1,100 workers to temporarily stop working.

Gov't reviews Vingroup's proposal on electric-car policy
Gov't reviews Vingroup's proposal on electric-car policy
FEATUREicon  10/06/2021 

Some Vietnamese enterprises have invested in electric-car manufacturing and charging stations, but an overall electric car strategy has yet to be developed by the government.

Banks cut lending interest rates to lowest level in years
Banks cut lending interest rates to lowest level in years
FEATUREicon  10/06/2021 

Banks have cut lending interest rates, now at the lowest levels in many years, to help people and businesses hit hard by Covid-19.

E-newspapers, ad agents urge amending of Advertisement Law
E-newspapers, ad agents urge amending of Advertisement Law
FEATUREicon  10/06/2021 

The Ministry of Culture, Sports and Tourism (MCST) will review the Advertisement Law and collect opinions to propose amendments that would allow press agencies to compete with cross-border platforms.

After decade of struggle, HAGL posts loss and gradually 'sinks'
After decade of struggle, HAGL posts loss and gradually 'sinks'
BUSINESSicon  09/06/2021 

The Hoang Anh Gia Lai Group (HAGL) of Chairman Doan Nguyen Duc has gradually withdrawn from the fields of business Duc has been dedicated to for a decade. 

PM wants to reform tax regime to prevent real estate speculation
PM wants to reform tax regime to prevent real estate speculation
BUSINESSicon  09/06/2021 

Prime Minister Pham Minh Chinh has emphasized that the national housing strategy needs to include reasonable social housing development, and the tax regime on land speculators should be adjusted.

VIETNAM BUSINESS NEWS JUNE 9
VIETNAM BUSINESS NEWS JUNE 9
BUSINESSicon  09/06/2021 

Vietnam exports first batch of lychee under EVFTA

Apple partner Pegatron injects additional US$101million into Vietnam
Apple partner Pegatron injects additional US$101million into Vietnam
BUSINESSicon  09/06/2021 

Taiwan has granted approval for a further investment of US$101 million by Pegatron Corp, a major manufacturing partner of Apple which operates in Vietnam.

Business stories May 31–June 6
Business stories May 31–June 6
FEATUREicon  09/06/2021 

People who are worth VND500 trillion are listed among the top 30 richest persons in the US and the top 17 in China, according to Forbes. In Vietnam, such a person would be at the top.

Vietnam faces shortage of cold storage warehouses
Vietnam faces shortage of cold storage warehouses
FEATUREicon  09/06/2021 

The growing tendency of consumers shopping online globally has led to a sharp demand for cold storage warehouses, but investment in cold storage facilities remains modest.

Billions of US dollars flow into Vietnam’s stock market despite Covid-19
Billions of US dollars flow into Vietnam’s stock market despite Covid-19
FEATUREicon  09/06/2021 

The stock market has been witnessing unprecedented cash inflow so far this year, even though the Covid-19 pandemic has become more complicated in Southeast Asia.

FDI supports Vietnam climb the global value chain
FDI supports Vietnam climb the global value chain
BUSINESSicon  09/06/2021 

Vietnam has successfully transformed into a manufacturing-oriented economy,
supported by stronger global value chain (GVC) participation thanks to a rise in foreign direct investment (FDI), especially in the manufacturing industry.

FDI inflows remains spotlight of Vietnam's economy
FDI inflows remains spotlight of Vietnam's economy
BUSINESSicon  09/06/2021 

The government has set up an FDI task force to support multinationals and foreign businesses grasping investment opportunities in Vietnam.

VIETNAM BUSINESS NEWS JUNE 8
VIETNAM BUSINESS NEWS JUNE 8
BUSINESSicon  08/06/2021 

Vingroup to produce Covid-19 vaccine

Trade with China: $20 billion in exports, $43 billion in imports
Trade with China: $20 billion in exports, $43 billion in imports
BUSINESSicon  08/06/2021 

Vietnam’s import and export activities in May were affected by the fourth Covid-19 wave, but they still increased generally.

Businesses need more effective support amid COVID-19
Businesses need more effective support amid COVID-19
BUSINESSicon  08/06/2021 

Like many countries, Vietnam may have to depend on vaccines to achieve herd immunity and be virus-free, but enterprises may not be able to wait. They are in dire need of help and are craving new momentum to return to a “real normal” situation.

 
 
 
Leave your comment on an article

OR QUICK LOGIN