The Asian Development Bank (ADB) has forecast the highest 2020 GDP growth rate in Southeast Asia for Vietnam at 4.1 percent.
The regional bank has placed Myanmar in second place with an estimated growth rate of 1.8 percent while Brunei in third place with 1.4 percent. Thailand is at the bottom of the list at -6.5 percent, behind Singapore (-6 percent) and Cambodia (-5.5 percent).
Southeast Asia’s average GDP growth is estimated to contract by -2.7 percent this year and expected to rebound to 5.2 percent next year.
The latest forecast for Vietnam in the bank’s Asian Development Outlook (ADO) 2020 report released Thursday is 0.7 percentage points lower than its previous forecast of 4.8 percent made in April.
The bank said the lower forecast was based on stagnation in agriculture because of prolonged drought and low export volumes. It also said the domestic flights recovery in May was not enough to make up for the 98 percent year-on-year drop in foreign tourists.
The ADB predicted that agriculture and services will continue experiencing slow growth for the rest of 2020 because of a fall in external demand and drop in domestic consumption after individual incomes dropped because of the global pandemic.
However, it also said it expects Vietnam growth to bounce back in 2021 and retained its earlier forecast for the year at 6.8 percent.
The latest report also revised downwards the inflation forecast for the whole year from 3.3 percent to 3 percent. Vietnam’s inflation this year is higher than the regional’s average of 1 percent, which is 0.9 percentage points lower than the previous forecast.
Vietnam recorded a decade-low GDP growth of 3.8 percent in Q1 as the country fought the Covid-19 pandemic, banning flights, asking non-essential businesses to close and closing tourist hotpots to foreigners.
Last year, the nation’s GDP growth hit 7.02 percent, the second highest growth figure in the last decade, after a record 7.08 percent in 2018.