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Vietnam’s Growth Accelerated in Last Quarter of 2020

Diep Nguyen
BizLIVE -

Industrial production and retail sales continued to expand solidly, with growth rates close to pre-pandemic levels.

Vietnam’s Growth Accelerated in Last Quarter of 2020
Photo: GettyImages
Vietnam’s growth accelerated to 4.5 percent in the last quarter of 2020 (y/y), resulting in anannual growth rate of 2.9 percent—making it one of the fastest growing economies in the world.
Industrial production and retail sales continued to expand solidly, with growth rates close to pre-pandemic levels.
December 2020 marked another strong performance of merchandise trade, with double digitgrowth rate in imports (23.1 percent) and exports (17.8 percent), while FDI inflows slowed.
Consumer price index remained flat in December 2020 (y/y), as food prices stabilized, whileconsumer demand has yet to fully recover from the crisis.
Credit growth picked up slightly after the State Bank of Vietnam cut policy interest rates inOctober, ending 2020 at 10.1 percent (y/y).
Auctions and granting of land use and rental improved revenue collection in the last quarter of2020, while ample liquidity continued to lower the Government’s borrowing cost in the domesticmarket.
The approval and rollout of several COVID-19 vaccines at the end of 2020 raised the outlook ofdomestic and global economies in 2021, particularly for tourism and airlines, but risks of vaccinesdistribution delays as well as trade frictions remain.
The government will need to assess carefullywhen to unwind macroeconomic policies launched in response to the crisis to minimize negativeimpact on the economy.
Vietnam continues to successfully contain theCOVID-19 pandemic.
As of January 13th, 2021, the country recorded1,520 COVID-19 infections and only 35 deaths. Inthe past thirty days, all identified COVID-19 caseswere imported.
Economic recovery accelerated in the last quarter of 2020, making Vietnam one of the fastest growing economies in the world.
The Vietnamese economy grew by 4.5 percent(y/y) in the 4th quarter of 2020, and thusexpanded by 2.9 percent in 2020. Although that’ssignificantly lower than the 7.0 percent growthrate in 2019, the country was one of the feweconomies that grew during the pandemic. 
At the sectoral level, agriculture turned out to be themost resilient with an estimated growth rate of 2.68 percent, about 0.67 percentage point higherthan in 2019. Industries and services grew at 3.98 and 2.34 percent, respectively, about 5 percentagepoints lower than in the previous year. 
The tourism-related sectors have been the mostaffected by the COVID-19 crisis withaccommodation and catering services dropping by14.7 percent in 2020 compared to 2019 while thenumber of foreign visitors in 2020 was only 21.3 percent of the one recorded a year ago.

DIEP NGUYEN