Vietnam’s GDP is likely to drop from 6.8 percent this year to 6.6 percent next year and 6.5 percent in 2020, the World Bank forecasts in its bi-annual report on Vietnam titled "Taking Stock" issued on Tuesday.
The slower growth will come because Vietnam, as a country with high trade openness, might have to face risks as the global economic environment becomes less favorable, the report says.
Globally, real GDP growth is projected to moderate from 3 percent this year to 2.9 percent next year. One of the reasons for the decrease is weaker global trade and investment growth as trade war tensions between the U.S. and China escalate.
"Slower global growth and ongoing trade tensions creates a lot of uncertainties for Vietnam," said Sebastian Eckardt, World Bank lead economist for Vietnam at the report releasing event.
Weaker global demand for exports and reduced investment trade flows into Vietnam as the U.S. Federal Reserve raises interest rates are other risks could affect Vietnam’s economy, he added.
He further said that the country should "maintain a responsive monetary policy, exchange rate flexibility and low fiscal deficit to enhance its resilience against potential shocks."
Although there are weakening external conditions, growth in Vietnam has proven resilient, supported by strong domestic demand and a dynamic export-oriented manufacturing sector, the report says.
It forecasts Vietnam’s GDP expansion this year to be the same as last year at 6.8 percent.
Inflation will remain at 4 percent thanks to the central bank’s tight monetary policies, and World Bank forecasts the figure will stay the same in the next two years.
Public debt will increase slightly from 61.4 percent of GDP last year to 61.5 percent, but still below the limit of 65 percent that Vietnam allows. The report forecast this figure to remains the same next year before dropping to 61.4 percent in 2020.
Ousmane Dione, World Bank country director for Vietnam, said: "Despite a challenging global context, Vietnam continues to achieve robust growth accompanied by moderate inflation and a relatively stable exchange rate."
He felt policy makers should take advantage of Vietnam’s current favorable growth to strengthen the private sector and improve public sector investment efficiency.
Từ vựng liên quan
Tin tức liên quan
A Vietnamese startup that provides multi-platform livestream service for social sellers, GoStream, has received a second round of investment from venture capital firm VinaCapital Ventures.
A boy who was found to have Covid-19 on arriving from Russia last month has recovered, bringing down Vietnam’s active cases to 20.
The woman had been working at a four-star hotel in Nha Trang resort town for nearly three years before being discovered.
Vietnam has no alternative energy source in the medium term to replace coal for power generation, Deputy Prime Minister Trinh Dinh Dung said.
Police in the Japanese prefecture of Chiba arrested six Vietnamese men for stealing 112 unripe melons from a farm in the remote eastern tip of the Boso Pensinsula on June 20, according to the Asashi Shimbun newspaper.
With U.S.-China trade spat showing no sign of ending soon, experts say it is time for Vietnam to take preventive action.