Optimism about Vietnam's economic growth in 2021

According to the World Economic Outlook Report in November 2020, the International Monetary Fund (IMF) forecasts that by 2020, Vietnam's economy will reach a growth rate of 2.4% and be one of four economies with the highest GDP growth rate in the world. Based on this positive growth, Vietnam's GDP growth in 2021 is expected to reach around 6.5% -7%.

The Vietnamese government has set a 2021 economic growth target of 6.5%. This expectation is based on the factor that Vietnam's macroeconomic stability remains. Besides, major financial institutions in the world also put positive predictions on Vietnam's growth in 2021. According to the World Bank (WB), Vietnam's GDP will increase at a rate of 6.8% in 2021. HSBC also predicted that Vietnam's economy will recover strongly, reaching a growth rate of 7.6% by 2021 in their latest report “Vietnam at a glance”. This statement is fully believed by HSBC when witnessing Vietnam's economic resilience in 2020.

Looking back to 2020, HSBC affirmed that, thanks to effective disease prevention measures, "Vietnam is one of the countries with the highest GDP growth in the world in the past year". GDP growth in the fourth quarter recovered stronger than expected, reaching 4.5%, bringing the growth of the whole of 2020 to 2.91%. In the fourth quarter of 2020, manufacturing activities returned to pre-translation levels, when they increased by 8% over the same period in 2019. Vietnam's exports outperformed other countries in the region when the growth for the whole year 2020 reached 6,5%. Besides manufacturing, the service segment also grew. Retail sales are on a steady recovery.

With its ownership of 16 Free Trade Agreements (FTAs), only less than Singapore in Asia, Vietnam is expected to take full advantage of FTAs. With lower tariffs and opportunities to access major markets, Vietnamese exporters will have a comparative advantage.  Besides, developing infrastructure and the service sector is expected to help Vietnam achieve a growth rate outperforming.