Recovery process to determine Vietnam's economic growth in 2021

Wednesday, 2021-10-13 17:49:39
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NDO – The World Bank (WB) in Vietnam has announced its latest update on Vietnam's economic performance which indicates the impacts of the fourth wave of the COVID-19 pandemic on Vietnam.

According to the WB, Vietnam's gross domestic product (GDP) in the third quarter of 2021 decreased by 6.2% over the same period last year, the sharpest decline since Vietnam started calculating and announcing its quarterly GDP. Therefore, the WB has revised down Vietnam’s GDP this year to 2.0% - 2.5%, down from its 4.8% forecast in August, depending on the recovery of the economy in the fourth quarter of this year.

However, it is optimistic due to the decreasing number of new infections, Hanoi and several other localities having eased strict restrictions on pandemic control, the recovery of travelling, industrial production index, and total retail sales of goods and services.

The industrial production index in September increased by 4.9% over the previous month but was still 5.5% lower than a year ago. Foreign direct investment (FDI) rose by 26.1% in September, the third consecutive month of increase, demonstrating the confidence of foreign investors in the long-term potential of the economy, according to the report.

However, according to the WB, the reopening of the economy will face several challenges, including shortages of labour and disruptions in industrial production and service provision caused by the exodus of workers due to months of social distancing.

The WB recommended Vietnam remove bottlenecks to logistics, continue to carry out COVID-19 testing and vaccination, and encourage labour mobility.

The competent agencies are also advised to apply expansionary fiscal policy and use various financial tools to support the economic recovery.