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According to the Asian Development Bank, the country´s economy showed a remarkable growth during 2019 and it was forecast to be one of the fastest-growing economies in Southeast Asia despite the pandemic.
Despite the impact of the COVID-19 pandemic, Vietnam´s economy will grow around 3.8 percent this year if there is not second outbreak by the second half of 2020, the National Institute for Economics and Policy Research (VEPR) forecasts.
At the presentation of the report, VEPR chief economist Pham The Anh said that in a worst-case scenario, Vietnam’s economy would grow by only 2.2 percent year-on-year, primarily due to the complicated progression of the Covid-19 crisis globally until the fourth quarter of this year.
According to the Asian Development Bank, the country´s economy showed a remarkable growth during 2019, and it was forecast to be one of the fastest-growing economies in Southeast Asia despite the pandemic.
In March, the government launch US10.8 billion package to combat the crisis, but despite the efforts, the COVID-19 pandemic has tightened several businesses as the Vietnam Chamber of Commerce and Industry estimates that nearly 60 percent of companies lack capital and are likely to reduce cash flow.
During the firsts six months, Vietnam’s GDP grew only by 1,81 percent, the lowest since 2011, yet an outstanding figure compared to its Asian neighbors.
The pandemic has had a significant impact on the manufacturing sector. “Mining, real estate, catering, and hospitality services are among the hardest-hit groups,” VEPR chief economist explains.
On the other hand, the VEPR has noted that to recover, measures such as freezing or waiving fees and taxes are more important than providing direct financial support. In this sense, the experts remarked that public investment is the best way to boost the economy at the moment, and the government should implement social security policies that also protect workers in informal sectors.