It said Vietnam’s economic growth trajectory remained on track, with exports in the first five months growing 35.5 percent year-on-year, while imports rose 54 percent.

Foreign direct investment (FDI) inflows remain upbeat so far in 2021, a reflection of investor confidence and Vietnam’s relevance in the global supply chain. Registered capital FDI this year as of May hit $14 billion, rising marginally by 1 percent from last year.

However, the fourth outbreak of Covid-19 that started on April 27 has resulted in movement restrictions and lockdowns that disrupted a range of business and manufacturing operations, it said in a Friday report.

UOB said the recent outbreaks of Covid-19 and discovery of new virus variants certainly pose a downside risk to the economy, as vaccination rates have been low relative to neighboring countries.

One factor to watch, according to UOB, is Vietnam’s inflation rate, which has risen to 2.9% year-on-year in May. Inflation rates in May increased by 0.16 percentage points compared to April, the highest growth rate since September 2020, driven by the growth in transportation and housing prices.

The government has a growth target of 6.5 percent this year.