Standard Chartered Bank has just lowered its forecast for Vietnam’s economic growth from 6.5% to 4.7%. This is the third time the UK-based multinational bank has lowered its GDP growth forecast for Vietnam for 2021, from a very high 7.8% at the beginning of the year to 6.7%, after that 6.5% and now only 4.7%, according to Vietnamese media reports on September 2.
The reason for Standard Chartered’s downgrade of Vietnam’s growth forecast is due to weak economic indicators, serious epidemic situation and slow progress of Covid-19 vaccination.
Although it forecast that economic growth is likely to recover in the fourth quarter of this year and improved global trade activity is likely to support Vietnam’s import and export activities, Standard Chartered said that if Covid-19 infections are not brought under control this month, the growth rate is likely to continue to decline, and the State Bank is likely to make a new interest rate cut.
According to the UK-based Bank, the pandemic is likely to continue to weaken foreign investment (FDI) flows into Vietnam and negatively affect the local tourism and service sectors from now until the end of the year.
Standard Chartered also lowered its growth forecast for Vietnam in 2022 from 7.3% to 7%.
At the end of last month, the World Bank also forecast Vietnam’s GDP at about 4.8% for the whole year of 2021, two percentage points lower than the forecast made in December 2020, due to the impact of the current COVID-19 outbreak.
According to the World Bank, the ability of Vietnam’s economy to recover will depend on the results of epidemic control, the effectiveness of vaccine deployment and fiscal measures to support businesses and households affected by the pandemic. affect.
The International Financial Organization also recommends that Vietnam improve the depth and effectiveness of social security programs, pay attention to bad debts and balance fiscal policy between the need for economic recovery and debt maintenance work at a sustainable level.
In the recently released Five-Year Socio-Economic Development Plan (2021-2025), Vietnam has set a 5-year average GDP target of 6.5-7%.