Vietnam is set to be one of the few countries globally to record positive economic growth this year, despite the global collapse in trade, travel, and investment caused by the novel coronavirus (COVID-19) pandemic, according to an article recently published by the Asia Times, an English language news media outfit.

Vietnam is set to be one of the few countries globally to enjoy positive
economic growth this year, despite the impact of the novel
coronavirus (COVID-19) pandemic

The relative success of the Vietnamese economy can be viewed as somewhat surprising considering that the Government has confirmed that it won’t put any potential economic recovery ahead of public health, the article noted.

However, the country is not only the envy of Southeast Asian neighbours who have been hit by COVID-19, but it has also earned international plaudits for its resilience, according to the article.

The article cited the Lowy Institute’s Asia Power Index which was published last month which revealed that the nation’s international image was one of the Asia-Pacific’s most improved this year, with its score in terms of diplomatic influence gaining six percentage points.

Furthermore, earlier this year the country enjoyed the third-highest improvement in terms of international reputation due to its handling of the pandemic.

In many ways, the nation has many advantages over its Southeast Asian neighbours, the article continued.

The service sector accounted for 45% of Vietnamese GDP last year, although it recorded growth of just 3.2% in the first quarter of the year, an annual drop of 6.5%.

“Vietnam’s economy is also less dependent than other Southeast Asian nations on tourism, which accounted for 9% of its GDP in 2018, compared with 32% for Cambodia and 20% for Thailand. It has thus faced less pressure due to the collapse of international travel”.

The country also went into the year on the back of two years of robust foreign direct investment flows. Most notably, June saw the nation ratify the EU-Vietnam Free Trade Agreement (EVFTA) and recently play host to a signing ceremony for the Regional Comprehensive Economic Partnership (RCEP), the world’s largest, Asia-centric trade deal which the country is now a member.

The article outlines how in a new report released by the IMF it is claimed that Hanoi’s “decisive steps to contain the health and economic fallout from COVID-19” were primary factors in recording positive economic growth this year, a recognition of the Communist Party’s quick and competent response.

The IMF therefore expect that this recovery will carry over strongly into 2021 with growth of 6.5% as normalisation of domestic and foreign economic activity continues.

During the first nine months of the year, the country registered US$21.2 billion in new foreign investment projects and overseas capital injections, equivalent to around 80% of the investment it received during the same period last year.

Many of the investments made this year won’t begin operation until 2021 or later, which also points to a healthy economic recovery in the coming time.