HCMC – Vietnam’s economy is predicted to bounce back in 2021, with gross domestic product (GDP) growth reaching 7.6% and inflation controlled at an average of 3.3%, according to an HSBC report.
The “Vietnam at a glance – Shining in the year like other” report said Vietnam’s economy has shown remarkable resilience despite the unprecedented challenges.
It’s one of the few economies in 2020 to clock in positive growth at a rate of 2.9% thanks to a confluence of positive factors, including the successful early containment of the new coronavirus, the quick resumption of work and the booming export of electronics.
Vietnam’s external sector has been able to withstand supply chain disruptions and is on a steady recovery path. Meanwhile, domestic demand has also held up well, with relatively resilient private consumption.
HSBC experts also expressed their optimism regarding the country’s strong growth in 2021, with Vietnam expected to benefit from the free trade agreements that it signed in 2020, including the European Union-Vietnam Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership (RCEP) and the United Kingdom-Vietnam Free Trade Agreement.
Lower tax rates and the higher ability to access key markets will bring advantages for Vietnamese exporters and help diversify their importing markets, while the flow of foreign direct investment into Vietnam will be maintained, as Vietnam is still an attractive investment destination.
“In general, with the national Vietnamese economy rebounding strongly, it is expected to reach a growth rate of 7.6% by 2021,” HSBC experts stressed.
The country will begin 2021 with a key political event, the 13th National Party Congress, which will set new economic priorities for the next five to 10 years.
All eyes will be on how the country promotes economic relationships with major trading partners in addition to ongoing reforms. In particular, infrastructure development and a possible acceleration of SOE equitization may be among the two key issues on the agenda, according to the HSBC report.