His forecast is similar to the Ministry of Planning and Investment’s estimate submitted to the government in August and close to the Asian Development Bank (ADB)’s forecast of 1.8 percent earlier this month.

The estimate was based on business and production performances in August and the first eight months of 2020 in the light of the Vietnamese government’s success in containing the spread of COVID-19 as well as extra efforts to disburse public investment and develop a better business climate for investors in the final quarter of the year and years to come, Lam said.

Additionally, Vietnam expects to reap benefits from free trade agreements (FTAs), particularly the EU-Vietnam FTA (EVFTA) which is thought to boost growth of the agriculture, fisheries and industry, he added.

“The government and localities have lifted social distancing rules and restored domestic and international flights,” he continued. “The government has been urgently implementing support packages for affected businesses and people to help them ease difficulties and stimulate domestic demand.”

The labour transition from the formal to informal sectors during such a difficult period has helped Vietnam avoid a negative growth like many other countries, he explained.

He further noted that China’s conomic recovery was also a factor in the positive forecast because of the close trade relations between Vietnam and the world’s second largest economy. China remains one of Vietnam’s largest importers and exporters of materials and goods, so its positive GDP growth will provide a major impetus for Vietnam’s economy, he added.

The ADB forecast Vietnam’s economy to expand 1.8 percent in 2020 amid the coronavirus and bounce back to 6.3 percent next year in its recent report.

According to statistics from the Ministry of Planning and Investment, Vietnam continued to maintain a stable macroeconomy with the August Consumer Price Index (CPI) rising 0.07 percent, 0.12 percent lower than the index at the end of 2019 that was the lowest between 2016 and 2020.

Disbursement of public investment surged 45.4 percent in August and 30.4 percent in the first eight months of the year, the highest during the period.

Foreign trade totalled more than 337 billion USD from January to August, up 0.03 percent from a year earlier. Exports exceeded 174 billion USD, a year-on-year increase of 1.6 percent, allowing Vietnam to enjoy over 11.9 billion USD in trade surplus.

Agriculture was forecast to pick up about 2.6 – 2.7 percent this year./.VNA

Large growth potential for Vietnam banking services in long-term

Many listed banks witnessed weak performance of fee income growth in the first six months of the year due to the Covid-19 pandemic.