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International Institutes Give out Less Rosy Vietnam’s Economic Outlooks than Vietnam’s Own

Diep Nguyen
BizLIVE -

The 4-5% GDP growth in the Prime Minister’s expectation seems to be very optimistic when compared to the expectations of growth from other institutions and banks.

International Institutes Give out Less Rosy Vietnam’s Economic Outlooks than Vietnam’s Own
Photo Credit: Financial Times
In the latest interview with Bloomberg Vietnam, Vietnam Prime Minister Nguyen Xuan Phuc said the export-dependent economy could sustain growth of 4-5% this year as the government looks to attract more foreign investment from businesses seeking to readjust their supply chains.
Accoring to the Prime Minister, the most important goal for the nation is to maintain economic stability and a low inflation rate to help businesses, investors and the people, Phuc told a small group of foreign media in Hanoi. The government will watch the movement of domestic and international markets to have suitable monetary policies to ensure reasonable growth, he said.
Also from Bloomberg interviews, while growth is likely to be lower than a previously targeted 6.8%, and down from 7% in 2019, the economy is still expected to expand this year, unlike most of Vietnam’s neighbors facing recessions. Phuc, in an interview Thursday evening, initially said growth for the year would be 5%. He gave the 4-5% growth range in a written answer to questions distributed after the interview.
The 4-5% GDP growth in the Prime Minister’s expectation seems to be very optimistic when compared to the expectations of growth from other institutions and banks.
A few days ago, Maybank Kim Eng released the report, in which Maybank Kim Eng economist predicted that Vietnam can enjoy 3.6% GDP growth this year. 
Cambodia, Laos, Myanmar and Vietnam have detected far fewer coronavirus cases than their more advanced Southeast Asian neighbors, but their economies are taking a beating all the same, potentially forcing a rethink of their development models down the road, Maybank Kim Eng economists said.
The 3.6% GDP growth as predicted by Maybank KimEng is still very rosy if we look at the 2.7% GDP growth this yeas as in the International Monetary Fund (IMF). IMF said that Vietnam can record only the 2.7% GDP growth this 2020 because the disatrous effects from the Covid-19 pandemic.
From Nikkei, tn the automotive sector, macro analysis outfit Fitch Solutions cautioned in February that vehicle production in ASEAN faced downside risks as COVID-19 spread. "Myanmar is the ASEAN region's most exposed automotive-producing country to work stoppages in China," Fitch said, noting that the country had the bloc's largest share of Chinese vehicle component imports at 28%, followed by Vietnam at 16.5%.
At the same time, the pandemic has hurt auto demand within Vietnam, according to Rajiv Biswas, APAC chief economist at IHS Markit. "In the first four months of 2020, sales of locally produced vehicles in Vietnam were down by 35%" year on year, he said. With "some recovery" expected in the second half, Biswas said the annual forecast for new light-vehicle sales points to a 15.6% decline to about 305,000 units.

DIEP NGUYEN

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