Vietnam

Standard Chartered lowers Vietnam’s 2020 growth forecast to 3.3%

Standard Chartered Bank Vietnam has shared insights from Standard Chartered Bank which reveals that the Bank has forecast that Vietnam’s economic growth will slow to 3.3% in 2020 due to increase in external headwinds.

The forecast was made in the Bank’s recently published Global Focus – Economic Outlook report for Q2 2020 entitled “Darkest before the dawn”.

Chidu Narayanan, Economist for Asia, Standard Chartered Bank, said “Vietnam is now more integrated with the global economy via its booming manufacturing sector; its trade-to-GDP ratio has risen to 300%, among the highest in Asia, signifying its high dependence on global demand.  Lower global demand amid likely recessions in the US, the euro area and other G10 economies will weigh on 2020 growth. We see growth rebounding to 6.5% in 2021 given an expected demand recovery and the low base from 2020.”

The report states that manufacturing growth, an industry which accounts for approximately 19% of the country’s GDP, is likely to decline sharply on slowing global demand. Similarly, the services sector, contributing close to 40% of GDP, is forecast to slow to approximately 4% in 2020 from 7.3% in 2019, according to the press release by Standard Chartered Vietnam.

Tourism has declined substantially amid COVID-19-related restrictions on cross-border travel and the Bank expects a sharp decline of roughly 60% in tourist arrivals in 2020. Agriculture growth is likely to remain steady at close to 4% in 2020, supported by a low base from 2019.

Tourism has declined substantially amid COVID-19-related restrictions on cross-border travel and the Bank expects a sharp decline of roughly 60% in tourist arrivals in 2020. Agriculture growth is likely to remain steady at close to 4% in 2020, supported by a low base from 2019.