The Vietnamese economy is predicted to enjoy a bounce back in 2021 with GDP growth reaching 7.6% and inflation being curbed at an average of 3.3%, according to experts of Hong Kong Shanghai Banking Corporation (HSBC).

This information was released as part of the "Vietnam at a glance - Shining in the year like other” report produced by HSBC.

The report outlines that despite facing unprecedented challenges, the Vietnamese economy has shown remarkable resilience. Indeed, during 2020 it was one of the few economies to record positive growth at a rate of 2.9%, due to the influence of positive factors. These include the successful early containment of the virus, the quick resumption of work after lockdown, and booming electronics exports. 

The nation’s external sector has also shown it is capable of withstanding supply chain disruptions and remains on a steady recovery path. Meanwhile, domestic demand has also held up well, with relatively resilient private consumption, largely due to facing minimal disruption caused by the virus.

HSBC experts also expressed their optimism regarding the country’s strong growth ahead in 2021, with the nation expected to benefit from several free trade agreements (FTAs), including the EU-Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP) and the UK-Vietnam Free Trade Agreement (UKVFTA).

Moving forward, it is anticipated that the nation will remain an attractive investment destination. “In general, with the national Vietnamese economy rebounding strongly it is expected to reach a growth rate of 7.6% by 2021,” HSBC experts stressed.

Economists also pointed out that the country will begin 2021 with a key political event, the 13th National Party Congress, which will set new economic priorities ahead for the next five to 10 years.

All eyes will be fixed on how the nation promotes economic relationships with major trading partners, in addition to ongoing reforms. In particular, HSBC thinks infrastructure development and a possible acceleration of SOE equitisation may be among two key issues on the agenda.