Standard Chartered lowers Viet Nam’s growth forecast to 2.7 percent

The lender projected that Viet Nam's economic growth would bounce back and recover in Q4 following opening path of enterprises and business activities and that the country's economy would expand 7 percent next year. 

Tim Leelahaphan, Economist for Thailand and Viet Nam, Standard Chartered was quoted as saying that COVID-19 disease control would influence short-term economic prospect. 

Previously, in September, Standard Chartered Bank lowered its GDP growth forecasts for Viet Nam to 4.7 percent from 6.5 percent for 2021 and 7.0 percent from 7.3 percent for 2022 due to softening economic indicators, the worsening pandemic and a still-slow vaccination rollout.  

In a report leased on October 4, Singapore-based financial service supplier DBS predicted that Viet Nam’s economic growth may reach 8 percent in 2022 thanks to rising flows of FDI and exports and digitalization impetus.

On October 3, the Vietnamese Ministry of Planning and Investment estimates the country's GDP growth in 2021 at 3-3.5 percent, down 0.5 percentage points from the forecast in September.

Viet Nam’s GDP dropped by 6.17 percent in the third quarter. In the first nine months, the GDP grew by 1.42 percent as against 2.12 percent in the same period last year.

The GDP growth last year was 2.91 percent, the lowest in a decade, but Viet Nam was one of a few countries in the world to achieve positive growth.

At a Saturday cabinet meeting, Prime Minister Pham Minh Chinh emphasized that this year's economic growth will largely depend on fourth quarter production and business recovery as well as safe adaptation and pandemic control.

He requested the Ministry of Planning and Investment to quickly complete a strategy and plan to restore and develop the economy in the "new normalcy."

Earlier, on September 23, the Asian Development Bank (ADB) revised its forecast for Viet Nam to 3.8 percent from 5.8 percent. The bank also predicted that Viet Nam’s economy would recover and expand 6.5 percent in 2022 if the pandemic is brought under control late this year and 70% of its population is vaccinated against Covid-19 by the second quarter of next year.

The ADB is still optimistic about Viet Nam’s mid-term and long-term growth outlook.  

In the latest edition of Taking Stock – the World Bank’s biannual update on Viet Nam’s economic performance which was released on August 24, the WB said that Viet Nam’s GDP is expected to expand by about 4.8 percent in 2021. This forecast, two percentage points lower than the projection made by the World Bank Group in December 2020, accounts for the negative impacts of the ongoing COVID-19 wave on economic activity.

While downside risks have heightened, economic fundamentals remain solid in Viet Nam, and the economy could converge toward the pre-pandemic GDP growth rate of 6.5 to 7 percent from 2022 onward.

By Kim Anh