Vietnam as well as other countries in the region are trying to deal with the economic impact of the coronavirus pandemic. Despite all challenges, the country’s government has targeted economic growth of 6.5% next year. It means the government wants to return to the pre-coronavirus level of economic growth. It is not an easy task. However, the manufacturing-led economy continues to emerge from its current slowdown.
People should take into consideration that the pandemic created huge pressure on the global economy. Governments as well as companies are struggling to deal with the pandemic. It is worth mentioning that the country’s Ministry of Planning and Investment expects the global post-pandemic recovery to take as long as four years. This information once more underlines the severity of the problem.
Nevertheless, the country’s government expects to rebound next year from the economic slowdown caused by the coronavirus pandemic. More precisely, the global slump created by the pandemic affected the local economy. According to authorities, the recovery is a top priority.
Importantly, the coronavirus originated in the neighboring country. However, Vietnam has managed to keep the situation under control. There are slightly above 1,000 cases in the country. People should take into account that the country’s population is more than 97 million people and without exaggeration, Vietnam reached formidable results. As a result, people have the opportunity to work. Moreover, it is possible to travel around the country.
Interestingly, Vietnam is often described as a global factory alternative to China. The country kept manufacturing goods for export, even though it was facing weak demand due to stay-at-home orders in major import nations.
Local economy and challenges
The country’s economy achieved formidable results for several years in a row. For example, the economy surged ahead since 2012, posting 6% growth or higher every year largely thanks to the manufacturing sector. Moreover, the spending power of its population increased in recent years. Notably, it stood at about $260 billion at the end of 2019.
Interestingly, officials asked the central bank in September to sustain a monetary policy that controls inflation and promotes economic stability. Furthermore, other ministries should bring in more foreign capital, increase exports, as well as stimulate domestic consumption.
The country recorded the lowest gross domestic product (GDP) growth in a decade. The GDP grew by 1.8% in the first half of this year. Moreover, it is expected to grow from 2% to 2.5% for 2020 overall. It is worth noting that, next year’s GDP depends on the availability of the coronavirus vaccine and international travel. As a reminder, Vietnam and most countries in Asia closed their borders to foreign tourists as a safeguard against infection. However, the country needs tourism nominally makes up 6% of the economy.
A free trade deal with the European Union (EU) is another important factor. Imports and exports to the EU should also make a difference in 2021.
The country has the potential to boost the economy. However, the state of global economy is far from being ideal. It will take time to return to the pre-coronavirus level of economic growth. Hopefully, the country’s government is ready to accomplish this goal.