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Standard Chartered lowers Vietnam’s 2021 GDP growth forecast to 4.7 per cent

Standard Chartered reduced its forecast for Vietnam's GDP growth.

The UK-backed lender predicts Vietnam’s GPD growth in 2021 to be 4.7 per cent, instead of the previous forecast of 6.5 per cent.

Standard Chartered Bank has revised its GDP growth forecasts for Vietnam for 2021 to 4.7 per cent from 6.5 per cent and 7.0 per cent from 7.3 per cent for 2022 due to softening economic indicators, the worsening pandemic, and a still-slow vaccination rollout.

The bank anticipates a further downgrade and an interest rate cut by the State Bank of Vietnam (SBV) if COVID-19 cases are not brought under control by September. It sees a rebound in the fourth quarter and expects trade data to remain supported by improving global trade. Softer economic growth is expected in the third quarter of this year, Standard Chartered noted.

The COVID-19 situation will likely continue to dampen inward investment for the rest of 2021 and may create further tourism uncertainty.

“Vietnam’s economy is being hit by the pandemic like many others in Asia and other parts of the world; however, we remain bullish on its economic prospects over the medium and long term,” said Tim Leelahaphan, economist for Thailand and Vietnam, Standard Chartered.

Standard Chartered