Asian Development Bank cuts Vietnam’s 2021 growth forecast

Many Vietnamese enterprises have to cut production due to the impact of the COVID-19 epidemic

Facing the ongoing pandemic situation in Vietnam, the Asian Development Bank (ADB) has revised down its forecast for Vietnam’s economic growth in 2021 from 6.7% to 5.8%. Vietnam’s state-controlled media reported on July 20.

Accordingly, ADB believes that the delay in vaccination implementation and the application of prolonged distancing measures in the southern region, the largest growth region of Vietnam, greatly affects the circulation of trade and restrict economic activities in 2021.

Previously, according to a survey by IHS Markit, the pandemic situation caused Vietnam’s Purchasing Managers’ Index (PMI) to plummet from 53.1% in May to 44.1% in June, ending the continuous upward momentum during the previous six months.

According to the survey, production activity and new orders of Vietnamese manufacturers decreased sharply in June due to the increase in the epidemic situation.

Faced with this situation, businesses have begun to reduce the number of employees and purchasing activities.

The worsening disease situation is affecting supply chains and delivery times have been extended to a high degree. Many businesses have slightly increased prices, reflecting the increase in costs. Logistics problems and a shortage of containers have also exacerbated the situation in Vietnam. (Translated)


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