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UOB projects Vietnam’s 2021 GDP growth at 6.7% despite COVID-19

UOB projects Vietnam’s 2021 GDP growth at 6.7% despite COVID-19

Saturday, June 26, 2021, 17:08 GMT+7
UOB projects Vietnam’s 2021 GDP growth at 6.7% despite COVID-19
This image shows a transaction taking place at a bank in Vietnam. Photo: Ngoc Phuong / Tuoi Tre

Singapore-based United Overseas Bank (UOB) has forecast that Vietnam’s gross domestic product (GDP) growth rate would rebound to 6.7 percent in 2021 from 2.9 percent in 2020, regardless of the impacts of the COVID-19 pandemic.

The forecast was released in the UOB’s projection issued on Friday for Vietnam’s economic growth in the third quarter of 2021.

Despite the COVID-19’s fourth wave that broke out in late April, Vietnam’s economy continued its recovery with its GDP growing by 4.5 percent in the first quarter of 2021 compared to the same period last year, the UOB said, citing statistics.

Last month, the country’s export value reached US$26.19 billion, down by 1.3 percent from April due to the pandemic’s impacts, but the total export turnover in the first five months of 2021 amounted to $131.13 billion, up 33.7 percent year-on-year, the Customs General Department reported.

Meanwhile, the January - May period saw $28.27 billion spent on imports, posting an increase of 1.8 percent from a year earlier.

Foreign direct investment (FDI) has still showed positive signs, with 613 new FDI projects licensed in the first five months of 2021 with a total registered capital of nearly $8.83 billion, up 18.6 percent from the same period last year, according to the Ministry of Planning and Investment.

Meanwhile, the Index of Industrial Production (IIP) in May was estimated to increase by 1.6 percent over the previous month and by 11.6 percent over the same month last year.

For the first five months of this year, the IIP rose by 9.9 percent year-on-year.

In general, positive psychology of investors in Vietnam has been reflected in both existing and new investment categories, despite the latest COVID-19 outbreaks wave that has slowed down and interrupted business and production activities in many localities.

Taking all into account, the UOB forecast a 6.7 percent GDP growth for Vietnam this year, 2.3 times higher than that in 2020 and 0.7 percentage points higher than the target set by the National Assembly.

In the financial and monetary field, the bank commented that the State Bank of Vietnam will likely to maintain its policies since the country is able to control the pandemic as effectively as in 2020 and that the COVID-19 vaccination has been accelerated.

The bank projected that the exchange rate between the Vietnam dong and the greenback will stand at VND23,000 U.S. dollar in the rest of this year, but it will increase to VND23,100 and VND23,200 in the first and second quarter of 2022, respectively.

The UOB also noted that Vietnam should keep watch on inflation, which rose to 2.9 percent in May from 2.7 percent in April and has been the fastest increase since September 2020.

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Vinh Tho / Tuoi Tre News


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