return icon

Vietnam's GDP growth to decline because of COVID-19

VinaCapital has predicted a 3 percent GDP growth rate reduction because of Covid-19, while Fitch has projected a modest growth rate of 3.3 percent, and ADB 4.8 percent.

VinaCapital’s report on Covid-19 impacts on Vietnam’s economy predicted that Covid-19 would be contained in Vietnam in late Q2 thanks to the strong and prompt measures taken by the government.




Covid-19 is expected slow global economic growth in the next two years.

Vietnam will be affected by the pandemic as it is a highly open economy with export/GDP and import/GDP ratios at 100 percent.

Sixty percent of Vietnam’s export products have low added value, such as textiles and garments, and low-cost wooden furniture. Meanwhile, the other 40 percent of exports have higher added value, including smartphones (accounting for 20 percent of total export value), digital cameras and household appliances.

The impact of the slowdown to the economy will be smaller than the sharp fall in the number of foreign travelers to Vietnam.

The value Vietnam gets from every dollar foreign travelers spend in Vietnam is higher than the money it earns from assembling products for export.

The value Vietnam gets from every dollar foreign travelers spend in Vietnam is higher than the money it earns from assembling products for export.

VinaCapital estimated that Covid-19 would lower Vietnam’s GDP by 3 percentage points this year. The 50 percent reduction in number of foreign travelers would lead to a 1.5 percentage point GDP decrease, while the production output growth would slow down by 1 percentage point and lower domestic consumption by 0.5 percentage point.

Fitch Ratings believes that Vietnam’s GDP will grow by 3.3 percent this year, the lowest growth rate since the mid-1980s.

The firm has revised the Outlook on Vietnam’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Positive, and has affirmed the rating at ‘BB’.

This year’s GDP growth rate is unpredictable since it depends on the pandemic both in Vietnam and its’ key export markets. The number of coronavirus cases reported so far remains low, but it may increase in the future, while some economic activities have been suspended to prevent the spread of the virus.

ADB on April 3 released a report, predicting that Vietnam’s GDP would grow by only 4.8 percent this year because of Covid-19 and the global trade decline.

A series of business fields, from manufacturing and processing to retail and import/export, all saw decline in Q1. The GDP growth rate in Q1 dropped to 3.8 percent from the 6.8 percent of the same period last year.

A survey conducted by the Advisory Council for Administration Procedure Reform in March found that 74 percent of polled businesses may have to suspend operation if COVID-19 cannot be contained by June 2020. 

Thanh Lich

Vietnam must reach GDP growth of 5 per cent this year: PM

Vietnam must reach GDP growth of 5 per cent this year: PM

Vietnam’s GDP growth in 2020 must reach 5 per cent, higher than the 2.7 per cent the International Monetary Fund (IMF) has forecast, Prime Minister Nguyen Xuan Phuc has said.

Economic growth slows as GDP rate threatened

Economic growth slows as GDP rate threatened

Sticky projected prospects caused by the global health crisis among  Vietnam’s key trading partners are expected to hit the domestic economy this year with the manufacturing and processing sector, one of the key growth pillars, to be hit hardest.


The best September photos on VietNamNet

Hot air balloons with the Vietnamese national flag of 1,800m2 on the banks of the Saigon River, Typhoon Noru making landfall in Quang Nam Province, the roofs of many houses being blown away...

BSR to expand Dung Quat Oil Refinery

The Ministry of Industry and Trade (MOIT) has asked Binh Son Refining and Petrochemical JSC (BSR) to clarify some issues related to its project on expanding Dung Quat Oil Refinery.

Dutch conductor to lead concert at Opera House

Conductor Leon Bosch from the Netherlands will lead a concert featuring masterpieces by European composers at the HCM City Opera House on Saturday, October 8.

‘578’ to represent Vietnam at Oscars

An action film starring Miss Universe Vietnam 2018, H'hen Niê, 578: Phát Đạn Của Kẻ Điên (578: Magnum), has been selected as Vietnamese representative at the 95th Oscars, 2023.

USD surges to VND24,000, US$1.7 billion withdrawn from circulation

The State Bank of Vietnam (SBV) withdrew nearly VND41 trillion ($1.7 billion) through open market operations as the US dollar rose to over VND24,000 on September 26-30, 2022.

HCM City to build a series of new traffic projects

HCM City is speeding up procedures to start the construction of key traffic works at gateways by the end of the year, according to HCM City's Department of Transport.

Burning garbage in Hanoi threatens residents' health, property

There have been consecutive fires caused by people's poor awareness, who were burning garbage and straw in residential areas, causing fires recently in Hanoi.

New cargo airline still waiting for license

After the Prime Minister agrees on the establishment of IPP Air Cargo, the Ministry of Transport (MOT) will implement procedures to grant a license to the air carrier, according to MOT Deputy Minister Le Dinh Tho.

Master plan for Mekong Delta focuses on infrastructure development

The Master Plan for the Mekong Delta designed for 2021-2030, with a vision to 2050, is focused on infrastructure development.

Current monetary policy quite suitable

Many people are concerned whether the country will face a tighter monetary policy and higher exchange and interest rates in the near future.

Danang, a wedding destination for India’s billionaires

Could Danang be the wedding destination of choice for Indian billionaires? It certainly has the right hotels and quality wedding infrastructure for the purpose, an Indian tourism company representative said.

Big shortage of human resources for artificial intelligence

Vietnam is facing a big shortage of human resources for artificial intelligence.

VN to improve science and technology market to reduce reliance on imports

Vietnam plans to focus on improving the science and technology market with the establishment of three trading platforms in order to reduce reliance on imports, Minister of Science and Technology Huynh Thanh Dat has said.

Vietnam may not reach goal of 5 million int’l visitors in 2022

Vietnam’s tourism industry aims to serve 60 million domestic tourists in 2022. By the end of July, the figure was already over 71 million visitors.

Vietnam sets course for zero carbon shipping by 2030

The Ministry of Transport has recently issued a plan with supportive measures for vessel owners to develop container ships with zero carbon emissions by 2030.