November 20, 2020 | 15:55
Vietnam is shaping up as Southeast Asia’s single economic success story in the coronavirus era, maintaining steady positive growth as other economies struggle to recover, said Nikkei Asia in a recent journal.
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“Sole economic winner in Southeast Asia”
Japan’s prestigious journal group Nikkei Asia published an article on November 19 to highly praised Vietnam’s dual effort to control COVID-19 pandemic and develop national economy. As stated by the journal, “Vietnam is shaping up as Southeast Asia’s single economic success story in the coronavirus era, maintaining steady positive growth as other economies struggle to recover.”
Vietnam’s real gross domestic product expanded 2.6% on the year in the third quarter, marking a second straight quarter of growth amid the pandemic, which, according to IMF, will bring the country to fourth in nominal GDP in the Association of Southeast Asian Nations this year, passing Singapore and Malaysia and gaining on the Philippines.
Vietnam has reported just 1,300 or so coronavirus cases to date, keeping the economic impact of the outbreak to a minimum. The country imposed a mass lockdown for only three weeks in April, and normal manufacturing activity resumed faster than it did elsewhere in the region. Job losses were limited, and consumer spending, which accounts for 70% of GDP, has remained solid.
Meanwhile, other ASEAN countries have yet to emerge from virus-induced slumps. The IMF’s full-year GDP forecast shows a 1.6% rise in Vietnam, but drops of 6% in Singapore and Malaysia and a 7.1% slump in Thailand.
Positive rise in economy despite COVID-19
The Japan’s journal said that the trade friction between the U.S. and China has benefited Vietnamese trade, thanks to manufacturers relocating factories out of China to avoid American tariffs. Vietnam’s per capita GDP of about $3,500 remains well below Singapore’s $58,500 and Malaysia’s $10,200. But the pandemic is accelerating a shift in the region’s economic pecking order. Exports grew 9.9% on the year in October to $26.7 billion, and the Ministry of Industry and Trade projects a full-year rise of 3% to 4%.
An ultra-large container ship operated by Maersk docked at Cai Mep in late October, a first for southern Vietnam’s largest port. While these vessels usually opt for other ports in the region, such as Singapore, Vietnam’s growing exports have boosted shipping demand enough to make it worthwhile for ships bound for Western countries to stop there.
This allows for more direct transportation of Vietnamese goods to buyers, which lowers shipping costs, shortens transit time and makes the country more competitive as an exporter.
Though some ASEAN countries predict a sharp rebound next year, Vietnam could remain the sole economy to see actual growth into the first half of 2021, depending on how the outbreak progresses.
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