The Asian Development Bank (ADB) recently forecast that Vietnam’s economic growth this year would be 4.1%, 0.7% points lower than its April estimate but still the highest expected in Southeast Asia.

A view of Ho Chi Minh City, an economic hub in the south of Vietnam
(Photo: VNA) 

It made the forecast in a regular update to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020, which was released in April.

Economic activity in Southeast Asia is expected to contract by 2.7% in 2020 before growing by 5.2% in 2021.

Contractions are forecast in key economies as containment measures to address the COVDI-19 pandemic have affected domestic consumption and investment, including Indonesia (-1.0%), the Philippines (-3.8%), and Thailand (-6.5%).

It also noted that developing Asian economies will barely grow in 2020 as coronavirus containment measures have hampered economic activity and weakened external demand.

The ADB projected growth of 0.1% for the region in 2020, down from the 2.2% forecast in April, which would be the slowest pace for the region since 1961.

It still maintained its 2021 forecast at 6.2% but said GDP levels in the year would remain below what had been envisioned and below pre-crisis trends.

“Economies in Asia and the Pacific will continue to feel the blow from the COVID-19 pandemic this year, even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario,” said ADB Chief Economist Yasuyuki Sawada.

“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur,” he added.