Vietnam among a few economies seeing positive

MInH tIen

Vietnam among a few economies seeing positive growth in 2020

The International Monetary Fund’s World Economic Outlook update released in October shows that Vietnam and China are among the few economies in the world to have maintained positive growth in 2020 amid the Covid-19 pandemic.

According to IMF, Vietnam’s GDP is forecast to expand by 1.6 percent in 2020 and make breakthrough growth of 6.7 percent in 2021. Vietnam's GDP is estimated to reach USD340.6 billion this year, making it the fourth-largest economy in Southeast Asia, surpassing both Singapore and Malaysia.

Ho Chi Minh City, Vietnam

Vietnam is the only economy in the ASEAN-5 group, which includes Indonesia, Thailand, Malaysia, the Philippines and Vietnam, that will maintain positive growth in a year in which the Covid-19 pandemic has been raging, exacerbating problems from the trade war between the U.S. and China.

Meanwhile, the Philippines is predicted to suffer the worst GDP decline among the ASEAN-5 group with negative growth of -8.3 percent in 2020. Thailand will come in second with negative growth of -7.1 percent while Malaysia and Indonesia will see growth of -6.0 percent and -1.5 percent, respectively.

In Asia, China will maintain positive growth of 1.9 percent while India is forecast to have its GDP growth down to -10.3 percent. Other emerging and developing economies in Asia will also suffer an average drop of 2.2 percent. Japan, the Republic of Korea, Singapore and Australia have recorded GDP decline of 5.3 percent, 1.9 percent, 6 percent and 4.2 percent, respectively.

Despite negative figures, the Asian region is still faring better than the rest of the world. All economies in the Americas are forecast to experience negative growth in 2020. GDP decline is also forecast to cover European economies including leading players such as Germany, France, Italy and Spain, amongst others.

Global growth is projected at –4.4 percent in 2020, a less severe contraction than was forecast in the June 2020 World Economic Outlook Update. The revision reflects better- than-anticipated second quarter GDP outturns, mostly in advanced economies, where activity began to improve sooner than expected after lockdowns were scaled back in May and June, as well as indicators of a stronger recovery in the third quarter.

The Covid-19 pandemic is considered to be the main cause of the decline in the global GDP outlook in 2020. However, most economies are expected to return to growth in 2021 although the growth in many countries will not make up for the losses in 2020, according to the IMF. Global growth is projected at 5.2 percent in 2021, and after this rebound it is expected to gradually slow to about 3.5 percent in the medium term.