The Vietnamese economy has demonstrated its strong resilience to the effects of the Covid-19 epidemic with a GDP growth of 2.9% in the past year and has become the few economies with positive growth in the world. In the first quarter, Vietnam’s economic growth of 4.5% was attributable to good export growth. Export turnover in the first 3 months of the year increased by 20% compared to the same period last year thanks to a strong increase in the export of electronics and equipment.
The report also said that Vietnam benefited from the high growth cycle of the global technology industry, strong FDI inflows, and gradually recovered production activities. This trend will be more positive thanks to the strongly improved demand from the outside market.
In addition, the average consumer price index (CPI) this year is forecast to increase by 3%, 1 percentage point lower than the target set by the State Bank. CPI in the first quarter only increased by an average of nearly 0.3% compared to the first quarter of 2020, because the pig price was adjusted downwards to offset the increase in gasoline prices.
When the inflationary pressure is not too great, HSBC expects that the State Bank will not change its monetary policy this year and keep the refinancing rate unchanged at 4%.
Besides the positive indicators of the economic picture in the first quarter, the report also pointed out a number of challenges and potential risks for the Vietnamese economy. Foremost is the slow deployment of the Covid-19 vaccine that will affect the tourism industry. It is estimated that Vietnam will have 150 million doses of Covid-19 vaccine to inject 70% of the population this year. The rest is expected to be compensated by the vaccine source produced by Vietnam. Besides, the slow recovery of the labor market will affect personal consumption.
Finally, HSBC recommends that supporting businesses and vulnerable employees remain a key task in the coming time.
Source: ndh.vn – Translated by fintel.vn