Vietnam eyes strong recovery from pandemic this year

Vietnam's economy is likely to experience a strong bounce back in 2021 with GDP growing at 6.9% in the best-case scenario

in which the country able to secure significant FDI investment boosts coupled with a strong recovery of the global economy, according to a forecast by the Vietnam Institute of Economics (VIE).

Container ships at the Tan Cang - Cat Lai Port in HCM City. The country's GDP growth is forecast to reach 6.9 per cent in 2021 in the best-case scenario. — Photo baodautu.vn

Other more conservative forecasts charted the country's GDP growth at 5.49 per cent and 3.48 per cent, heard participants at a press conference yesterday in Ha Noi during the release of the Viet Nam Economy Report by the Vietnam Academy of Social Sciences (VASS).

Doctor Pham Sy An from VIE said Viet Nam's GDP growth was reported at 2.9 per cent, the lowest figure since the beginning of the Renewal era in 1986. This, however, could still be considered a significant achievement against a backdrop of a reeling global economy due to the COVID-19 pandemic, which sent major economies including the US (-5.9 per cent), the EU (-7.5 per cent) and the UK (-6.5 per cent) nosediving into negative territory.

According to a World Bank report on Viet Nam's economy released earlier this month, the country is in an excellent position to pull off a strong recovery as GDP growth for the last quarter of last year accelerated to 4.5 per cent, making it one of the fastest-growing economies in the world.

Industrial production and retail sales continued to expand solidly, with growth rates close to pre-pandemic levels. Meanwhile, auctions and granting of land use and rental improved revenue collection in the last quarter of 2020, while ample liquidity continued to lower the Government’s borrowing cost in the domestic market.

In December 2020, the country's exports and imports grew 17.8 per cent and 23.1 per cent, respectively, recording the highest growth rates since the outbreak of the coronavirus. The country's trade balance reached $279.6 million, continuing an eight-month streak of surpluses and ending the year with a record total of $19.3 billion.

While the country's tourism and hospitality industry was hit hard by the pandemic, other industries such as medical equipment, the stock market, insurance and e-commerce have seen rapid growth in 2020.

The pandemic has also pushed a number of industries to restructure and apply science and technology in an effort to streamline operations and cut costs, which will likely benefit them in the long-term.

Economists and business experts at the conference urged policymakers to take concrete measures to speed up the country's digitalisation and bolster innovation culture, saying they are to play key roles in the post-pandemic recovery. Meanwhile, measures must be taken to address a slow trickle of stimulus packages and a lack of support for businesses and vulnerable groups in society.

They also called for faster policy reforms and incentives for the private sector to take part in the development of an innovation and science culture as well as a national strategy for digitalisation. — VNS