VINACHEM

The International Monetary Fund (IMF) has forecast that Vietnam’s economic growth will slow to 2.7% this year due to the coronavirus pandemic but may rebound strongly to 7% next year.

According to IMF representative in Vietnam Francois Painchaud, the country’s strict measures to contain the coronavirus, the global recession and weak domestic demand are elements that will slow its economic growth this year from an average of roughly 7% in 2018 and 2019.

However, Painchaud noted that growth is expected to recover as preventive measures are lifted, reaching 7% in 2021, supported by monetary and fiscal easing, the country’s relatively strong macroeconomic fundamentals and a gradual recovery in external demand.

Speaking at a meeting of the government last week, Prime Minister Nguyen Xuan Phuc said the Vietnamese Government is determined to achieve an economic growth rate this year higher than the IMF’s estimate of 2.7%, possibly over 5%.

Standard Chartered earlier lowered Vietnam’s economic growth forecast in 2020 to 3.3%. The bank forecast that growth would rebound to 6.5% in 2021 given an expected recovery in demand.

Meanwhile, the Asian Development Bank predicted that the coronavirus pandemic could drop Vietnam’s growth to 4.8% this year, but the country would remain one of the fastest growing economies in Asia.