Vietnam posted the fastest growth in Asia in 2020 and will once again be among the most outstanding performers in the region this year, according to the Hong Kong Shanghai Banking Corporation (HSBC).

In its latest “Asia Economics Quarterly” report, HSBC said despite unprecedented challenges, Vietnam has strongly overcome the pandemic crisis. With a population of over 95 million, the country has managed to flatten the COVID-19 curve much sooner and keep the infection tally at around 1,400 thanks to swift and effective prevention efforts by State agencies.

Though the 2020 GDP growth of 2.91% was the lowest in the recent decade, it was still assessed as a big success and among the world’s highest considering the complicated development of the COVID-19 pandemic.

Inflation decelerated from 3.9% in the first three quarters to 1.5% in November compared to the same period of 2019 thanks to normalised good prices and declined oil prices.

HSBC researchers expressed their belief that Vietnam will benefit from tech-led recovery, sustained FDI inflow, and many free trade agreements signed.

However, they still slightly revised the country’s 2021 growth forecast down to 7.6%, from the previous estimate of 8.1%, due to a prolonged recovery in the tourism industry.

They held that although the country is now ready to outpace other countries in the region in 2021, there remain risks to its economic recovery.

Many obstacles still exist in the tourism sector, HSBC said, noting though the worst may have passed after the second quarter, tourism-related services like accommodation and transportation are still in a bleak situation as a result of cross-border travel restrictions.

The second wave of COVID-19 infections in late July was swiftly brought under control, but it could make the Government more prudent in reopening borders and attracting international visitors. A meaningful tourism recovery is unlikely in the time ahead until effective vaccines are available and there is a global integrated approach to international tourism, according to HSBC