The Asian Development Bank (ADB) has just revised its forecast for Vietnam’s Gross Domestic Product (GDP) growth in 2021 to only 3.8%, much lower than the figure of 6.7. % at the beginning of the year. This is the third time ADB has lowered its economic growth forecast for Vietnam.
Vietnam’s economic growth accelerated in the first half of 2021 mainly due to increased trade flows. However, the outbreak of the COVID-19 pandemic that started in late April has caused labor shortages due to social distancing, reduced industrial output and disrupted Vietnam’s agricultural value chains, the bank said in a report released on September 22.
Accordingly, GDP in the third quarter is forecasted to grow by 4.2%, of which the industry and construction sector grows by more than 6%, the service and agriculture sector grows by 2.9-3.1%, leading to forecasted growth for 2021 of 3.8%.
According to ADB, Vietnam’s economic growth prospects in the short term are also challenging. One of the biggest challenges is the prolonged Covid-19 epidemic, while the percentage of workers who receive two full doses of the vaccine remains low. However, Vietnam’s economy still has a chance to recover if the Covid-19 epidemic is controlled by the end of this year and by the second quarter of 2022, 70% of the population will be vaccinated.
ADB’s report downgraded Vietnam’s economic growth forecast, released 3 weeks after Vietnam announced its socio-economic results in the first 6 months, in which economic growth was announced at 5.6%.
Earlier in July, when the Asian Development Outlook 2021 was announced, ADB lowered its forecast for Vietnam’s economic growth this year to 5.8%, 0.9 percentage points lower than with the forecast in April. The reasons given by ADB are the slow implementation of vaccinations, the prolonged application of social distancing, which greatly affects the circulation of commerce and restricts economic activities.
Vietnam has set an economic growth target for 2021 of around 6%. Last year, Vietnam’s GDP was only 2.91%, the lowest growth rate recorded in the past decade.