Vietnam economy to expand 6.7 pct in 2021
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Singaporean lender United Overseas Bank (UOB) forecast Vietnam’s GDP would grow by 6.7 percent this year.
It said Vietnam’s economic growth trajectory remained on track, with exports in the first five months growing 35.5 percent year-on-year, while imports rose 54 percent.
Foreign direct investment (FDI) inflows remain upbeat so far in 2021, a reflection of investor confidence and Vietnam’s relevance in the global supply chain. Registered capital FDI this year as of May hit $14 billion, rising marginally by 1 percent from last year.
However, the fourth outbreak of Covid-19 that started on April 27 has resulted in movement restrictions and lockdowns that disrupted a range of business and manufacturing operations, it said in a Friday report.
UOB said the recent outbreaks of Covid-19 and the discovery of new virus variants certainly pose a downside risk to the economy, as vaccination rates have been low relative to neighboring countries.
One factor to watch, according to UOB, is Vietnam’s inflation rate, which has risen to 2.9% year-on-year in May. Inflation rates in May increased by 0.16 percentage points compared to April, the highest growth rate since September 2020, driven by the growth in transportation and housing prices.
The government has a growth target of 6.5 percent this year.
Questions & Answers
Q.What are the main risks that could hinder Vietnam's economic growth trajectory this year?
What are the main risks that could hinder Vietnam's economic growth trajectory this year?
The recent outbreaks of Covid-19 and the discovery of new virus variants pose a downside risk. Low vaccination rates relative to neighbouring countries and a rising inflation rate are also factors to watch.
Q.How do Vietnam's export and import figures compare in the first five months of this year?
How do Vietnam's export and import figures compare in the first five months of this year?
Exports grew by 35.5 percent year-on-year in the first five months of 2021. Imports rose even more significantly, increasing by 54 percent over the same period.
Q.What is the current status of foreign direct investment into Vietnam as of May this year?
What is the current status of foreign direct investment into Vietnam as of May this year?
Foreign direct investment inflows remain upbeat so far in 2021. Registered capital FDI reached $14 billion as of May, showing a marginal 1 percent increase from last year.
Q.How does the UOB's GDP forecast for Vietnam compare to the government's own growth target?
How does the UOB's GDP forecast for Vietnam compare to the government's own growth target?
UOB forecasts Vietnam’s GDP to grow by 6.7 percent this year. This is slightly higher than the government's official growth target, which is set at 6.5 percent for the year.
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