Vietnam economy unexpectedly expands, bucking global plunge

HANOI, Vietnam – Vietnam’s economy unexpectedly expanded in the 2nd quarter, shrugging off a coronavirus pandemic-caused global downturn, but it was still the country’s slowest growth in nearly 3 decades.

Gross domestic product (GDP) rose by 0.36% from April to June compared to the same period last year, the General Statistics Office in Hanoi announced on Monday, June 29.

“It’s the lowest ever GDP growth since Vietnam started publishing GDP figures in 1991,” official Duong Manh Hung was quoted as saying in local media.

Border closures from coronavirus restrictions took a punitive toll on Vietnam’s exports, which fell 9% year-on-year and were down 8.3% against the first 3 months of the year.

The country’s economy is heavily reliant on exports, particularly after reaping the benefits of a trade spat between Washington and Beijing over the last two years.

Both sides imposed punitive tit-for-tat tariffs on hundreds of billions of dollars of goods, prompting many China-based businesses to migrate to the perceived safer and cheaper manufacturing hub of Vietnam.

The country now aims to reboot its economy after its apparent success in minimizing fallout from the coronavirus.

The International Monetary Fund in April predicted the Southeast Asian nation would take the lead in Asia with a GDP growth rate of 2.7% in 2020. 

Vietnamese Prime Minister Nguyen Xuan Phuc has said his government would try to keep growth above 5%.

“It will be very difficult, even impossible, for us to reach our targets in the context of the pandemic and with the broken global supply chain,” said Duong Manh Hung.

The country has reported just 355 coronavirus cases and no deaths, a record it puts down to strict quarantine policies and tracing measures. – Rappler.com