Vietnam maintains positive outlook for economic recovery in 2021: WB

(VOVWORLD) -  The rapid suppression of the new COVID-19 outbreak in late January 2021 has helped maintain Vietnam’s positive outlook for economic recovery this year, the World Bank (WB) has said.
Vietnam maintains positive outlook for economic recovery in 2021: WB - ảnh 1Illustrative image (Photo: VNA)

In its latest Vietnam macro Monitoring Report, the WB said, looking ahead, special attention should be paid to how the COVID-19 vaccinations will be rolled out domestically and globally as they will impact the pace of Vietnam’s economic growth. Further fiscal and monetary policy interventions may be needed to support recovery of private demand.

According the WB, the Vietnamese government quickly introduced strict but targeted measures to suppress this new outbreak of COVID-19 in Hai Duong, the epicenter, including during the Tet holidays.
As a result, the number of new cases started decreasing, and restrictions were partly eased in the second half of the month.
In the meantime, Vietnam has approved three types of vaccines. The government also approved a resolution to purchase a total of about 150 million doses of COVID-19 vaccines, and prioritized recipient groups.
The WB noted that industrial production slowed as factories closed in observance of the Tet holidays. Industrial production index dropped by 7.2 percent year-on-year in February 2021. This decline is mainly reflecting the cross-year difference in the timing of the Tet holidays, when factories shut down for a week. The two-month moving average still registered an increase of 8.8 percent year-on-year in the first two months of 2021. Metals production, and electronics, computers and optical products continued to grow by 8.6 percent and 3.2 percent, respectively in February, thanks to strong external demand.
Despite the new COVID-19 outbreak, retail sales in February grew by 0.3 percent month-on-month and by 8.3 percent year-on-year due to higher consumption demand associated with the Tet holidays. While lower than pre-COVID-19 performance, this growth suggests that the government’s targeted response to the outbreak mitigated the spillover of the negative impacts of anti-COVID stringency measures on economic activities to provinces outside the epicenter.
Vietnam’s merchandise exports fell by 4.2 percent year-on-year while imports grew by 11.8 percent year-on-year in February 2021, resulting in the first month of trade deficit since April 2020.