Viet Nam is predicted to record positive growth this year, especially in the context of US-China trade tensions that may persist in the coming years.
As a leading financial newspaper run by Japanese media giants Nikkei Inc, Nikkei Asia stated that: “Southeast Asia’s growth leader in 2021 may well be Viet Nam,” during a recent article detailing ASEAN’s GDP forecasts for the year ahead.
According to Nikkei, the country recorded economic growth of 2.9 per cent last year due to its success in containing the novel coronavirus (COVID-19), in addition to robust exports of electronics and other consumer products, with the nation reportedly targeting a growth rate of 6.5 per cent this year.
Gareth Leather, senior Asia economist at Capital Economics, said that Vietnamese exports should continue to be supported by tariffs imposed by the US on Chinese goods.
He noted that: “To avoid US tariffs, importers have shifted demand from China to alternative suppliers. With US-China relations likely to remain strained over the years ahead, this trend is likely to continue.”
The newspaper also stressed that before the pandemic, Southeast Asia achieved collective annual growth of approximately 5 per cent over the course of many years, therefore making it one of the world’s best-performing regions in economic terms.
According to media reports, the region has become an attractive investment destination, with a relatively young population that drives demand and provides plenty of manufacturing labour. Although these factors can be viewed as advantages that can boost economic growth, the region’s top priority in the short term is to stamp out COVID-19.
Previously, many Japanese and international newspapers made positive forecasts about Viet Nam’s economic prospects. In the article entitled Overcoming the COVID-19 pandemic, Viet Nam’s economy grows favorably, Dr. Bui Manh Hung attributed Viet Nam’s successful control of the COVID-19 pandemic to three main reasons: absolute trust in the Vietnamese Government’s direction, strict compliance with the Government instructions, and people’s unity and awareness of the dangers of the pandemic, and that has attracted great attention of Japanese readers.
The article said that the COVID-19 pandemic is causing terrible impacts on the socio-economic development of countries around the world and many countries have suffered negative economic growth. But, Viet Nam’s economy in 2020 achieved a surprising growth of 2.91 per cent and is forecast to continue to grow at a high level in 2021, becoming a bright spot of the world economy, according to an article published in Japan’s journal Security Anpo, January edition.
The author quoted Prime Minister Nguyen Xuan Phuc in emphasising Viet Nam’s economic growth of 2020 with a stable macro economy, low-level inflation, positive growth and improved economic balance. Although investment and trade shrank due to the pandemic, the economic growth was still at a high level compared to other countries in the region and around the world.
With its success in pandemic response, Viet Nam has worked out effective policies and measures to restore the economy, according to Security Anpo.
The article highlighted Viet Nam’s success in signing international economic agreements. On November 15, 2020, ASEAN, including Viet Nam and five partner countries Japan, China, India, Australia, and New Zealand signed the Regional Comprehensive Economic Partnership (RCEP). This agreement is expected to promote the formation of global supply chains to contribute to the economic development of member countries including Viet Nam. Previously, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Free Trade Agreement with the EU (EVFTA) was also signed, demonstrating Viet Nam’s determination in implementing its economic commitments.
The author said Viet Nam is attracting great attention from foreign investors. Signing many international agreements, Viet Nam commits itself to create favourable conditions for foreign investors. Many investors from the US, Japan, and South Korea want to move their businesses to the Vietnamese market or plan to start a business in Viet Nam, the article said.
The author said that there were many forecasts about Viet Nam’s economic growth in 2021. A reputable UK bank forecasted that by 2021, the Vietnamese economy would likely reach 7.8 per cent growth, while Asian Development Bank (ADB) forecasted 6.3 per cent. Many other experts and prestigious economic organisations were also optimistic about Viet Nam’s economic growth in the coming years.— VNS