It would strongly rebound to 7 percent in 2021, the IMF said in its "World Economic Outlook" report released on Wednesday.

Vietnam’s inflation rate is forecast to be 3.2 percent, lower than the 4 percent target set for the year, the report said.

The government targets annual GDP growth of 7 percent from 2021 to 2025 to make up for the slowdown caused by the Covid-19 pandemic.

In the country’s neighborhood, the Philippines and Indonesia are expected to grow at 0.6 percent and 0.5 percent this year while Thailand and Malaysia are bracing for a contraction.

"Assuming the pandemic fades in the second half of 2020 and that policy actions taken around the world are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains, we project global growth in 2021 to rebound to 5.8 percent," said Gita Gopinath, the IMF’s economic counselor and director of the research department. 

The World Bank had earlier this month forecast Vietnam to grow at 4.9 percent this year while market research firm Fitch Solutions estimated it at 2.8 percent.

Vietnam recorded a decade-low GDP rate of 3.8 percent in the first quarter after non-essential businesses and tourist destinations were ordered to close. 

Last year GDP growth was 7.02 percent, the second highest in a decade behind the 7.08 percent in 2018.