Vietnam's GDP growth forecast lowered
  • | laodong, | August 20, 2021 01:06 PM
Several organisations have lowered Vietnam's GDP growth forecast due to the continued Covid-19 issues.


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Dragon Capital lowered the predicted growth rate to 3.7%.

Vndirect Securities Corporation said if the fourth wave lasts longer than expected, Vietnam's GDP growth rate will be around 5%, lower than the previous forecast of 6.5%.

According to Vndirect, many industrial parks have to close because of the pandemic and the vaccination rate is still slow due to short supply. At this rate, less than 30% of the population will have the first jabs by the end of 2021 and Vietnam will not be able to reopen the tourism market for international tourists. Some countries like the US and China may have to delay their reopening plans because of Delta Variant.

The service sector will be the hardest hit and see a growth rate of only 2.4%. The industry and construction sectors will recover slowly because of the disrupted global supply chain and see a growth rate of 7.3%. Inflation will be controlled as utility bills are reduced as part of Covid-19 relief.

VEPR gave out three scenarios for the GDP growth rate. In the most likely scenario, the fourth wave will be controlled in the third quarter and the vaccination programme will be sped up in the second quarter of 2022. Vietnam's GDP growth rate would be around 4.5-5.1%.

If the outbreak can be controlled in August and herd immunity can be achieved in the first quarter of 2022, the GDP growth forecast would be at 5.4-6.1%. In the worst-case scenario, the outbreak can not be controlled quickly and economic activities can not return to normal at the end of 2021, the GDP growth rate will be around 3.5-4%.

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