World Bank: Viet Nam’s economy remains resilient in face of the Covid-19 pandemic

The World Bank on April 2020 released its report “East Asia and Pacific in the Time of COVID-19“, which forecasts that Viet Nam will be amongst few countries in the region which keep growing in 2020. World Bank’s preliminary estimates suggest that the rate of expansion of Viet Nam could be about 4.9 percent in 2020.

According to the World Bank, while Viet Nam is significantly exposed to the COVID-19 outbreak and the ongoing turbulence in the global financial markets, its economy remains resilient to external shocks. Given its deep integration with the global economy, Viet Nam was hit hard by the COvID-19 outbreak, with manufacturing, tourism, and transport activities falling abruptly during the first two months of 2020. Even though, Viet Nam can maintain its relentless growth: in the first two months, exports have expanded by 8.0 percent, FDI inflows amounted to $2.5 billion and retail sales were up by 5.4 percent.

With adequate policy buffer in hand, Viet Nam appears to be well-positioned to overcome the ongoing health and economic crisis.  The medium-term outlook is broadly favorable, even significant downside risks are tied to adverse stronger and longer impacts of the coronavirus outbreak, weak external demand, and incomplete structural reforms. On the upside, Vietnam is strongly positioned to benefit from numerous free trade agreements that are coming into force, including the CPTPP that Viet Nam and Canada are members of.