November 25, 2020

Vietnam economy unexpectedly expands, bucking global plunge

2 min read

HANOI: Vietnam’s economy unexpectedly expanded in the second quarter, shrugging off a coronavirus pandemic-caused global downturn, but it was still the country’s slowest growth in nearly three decades.

Gross domestic product rose by 0.36 per cent in the April to June period, compared to the same period last year, the General Statistics Office in Hanoi announced on Monday (Jun 29).

“It’s the lowest ever GDP growth since Vietnam started publishing GDP figures in 1991,” official Duong Manh Hung was quoted as saying in local media.

Border closures from coronavirus restrictions took a toll on Vietnam’s exports, which fell 9 per cent year-on-year and were down 8.3 per cent against the first three months of the year.

The country’s economy is heavily reliant on exports, particularly after reaping the benefits of a trade spat between Washington and Beijing over the last two years.

Both sides imposed punitive tit-for-tat tariffs on hundreds of billions of dollars of goods, prompting many China-based businesses to migrate to the perceived safer and cheaper manufacturing hub of Vietnam.

The country now aims to re-boot its economy after its apparent success in minimising fallout from coronavirus.

The International Monetary Fund (IMF) in April predicted the Southeast Asian nation would take the lead in Asia with a GDP growth rate of 2.7 per cent in 2020.

Vietnamese prime minister Nguyen Xuan Phuc has said his government would try to keep growth above 5 per cent.

“It will be very difficult, even impossible, for us to reach our targets in the context of the pandemic and with the broken global supply chain,” said Duong Manh Hung.

READ: Virus-free Vietnam not ready to open doors to foreign tourists yet: PM

READ: Commentary: Vietnam is emerging a lot stronger from this coronavirus outbreak

The country has reported just 355 coronavirus cases and no deaths, a record it puts down to strict quarantine policies and tracing measures.