Vietnam’s GDP growth is forecast to decelerate to a new low of 2.7% in 2020, but would remain ahead of regional peers, according to the International Monetary Fund (IMF)’s latest update in its World Economic Outlook in April.
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The country's consumer price index is set to hit 3.2%, lower than the 4% growth target this year. Its economy could be subject to a strong rebound of 7% GDP growth rate in 2021, the report stated.
Such growth would place Vietnam ahead of neighboring countries such as the Philippines and Indonesia with modest growth rates of 0.6% and 0.5%, respectively. Others like Thailand and Malaysia are bracing for contraction.
Regarding major global economies, the IMF expected the US economy to shrink 5.9%, the worst since 1946. China is projected to grow 1.2%, the lowest in 44 years, and Japan's contraction could be 5.2%, the lowest in 11 years.
The outlook is even more gloomy for European countries, as Italy is subject to the deepest contraction of 9.1%, followed by Germany with 7% and Britain with 6.5%.
Meanwhile, IMF’s April World Economic Outlook projected global growth in 2020 to fall to 3%, a significant downgrade of 6.3 percentage points from January 2020, making this current Covid-19 crisis “the worst recession since the Great Depression, and far worse than the Global Financial Crisis,” stressed Gita Gopinath, IMF Economic Counsellor.
For the first time since the Great Depression both advanced economies and emerging market and developing economies are in recession, Gopinath added.
Growth in advanced economies is projected at -6.1% this year. Emerging market and developing economies with normal growth levels well above advanced economies are also projected to have negative growth rate of -1% in 2020.
Assuming the pandemic fades in the second half of 2020 and that policy actions taken around the world are effective in preventing widespread firm bankruptcies, extended job losses, and system-wide financial strains, the IMF projected global growth in 2021 to rebound to 5.8%.
The Asian region would serve as a driving force for global economic recovery in 2021 with China coming strong at a 9.2% GDP growth rate, India with 7.4% and the ASEAN–5 (Indonesia, Malaysia, the Philippines, Thailand and Vietnam) recording an average growth rate of 7.8%.
