IMF lowered its forecast of Vietnam's GDP growth in 2020 to 2.7%

After the US-China trade war, the Asian supply chain re-shaped because of the epidemicIMF lowered its forecast of Vietnam's GDP growth in 2020 to 2.7%

(Author GIANG LE and translated by TranHoaiDuc.com with the source from Forbesvietnam.com)

The "World Economic Outlook" released on April 14 by the World Monetary Organization (IMF) has reduced Vietnam's GDP growth forecast this year to 2.7% from 7% in Jan 2020 and expected to recover to 7% by 2021.

As such, Vietnam is assessed by the IMF as having the most promising growth prospects in ASEAN 5 in the difficult period due to the current pandemic.

GDP forecast for ASEAN 5 group, including Indonesia, Thailand, Malaysia, Philippines and Vietnam, is expected to shrink by 0.6% this year. The strongest reduction in GDP belongs to Thailand (approximately 9%) when the tourism industry contributes 16% of the GDP here which is crippled by the disease.

By the end of March, the World Bank (WB) also forecasted that the current pandemic could push Vietnam's GDP growth this year down to 4.9%, about 1.6 percentage points lower than that. The previous forecast could even reach the 1.5% mark in the worse scenario.

"It is likely that this year's world economy will experience the worst recession since the Great Depression, more than the global financial crisis of the previous decade," said Gita Gopinath, chief economist and IMF director of research department said.

Accordingly, the IMF reduced the rate of global economic growth to -3% for 2020, lower than 6.3% compared to the forecast made in January 2020. In which, the leading economic powers will cower at the impact of the pandemic: US GDP growth in 2020 is forecast to decrease to -5.9% from 2.3% last year.

The forecast for China also drops to 1.2% from 6.1% in 2019. European countries, which are struggling with Covid-19, will also experience negative growth this year, with UK GDP growth of -6.5%, Germany -7%, France -7.2%, Italy -9.1% and Spain -8%.

Looking to 2021, the IMF believes that the world economy will recover after the pandemic with GDP growth rate in 2021 expected to rise to 5.8%, with the developed countries reaching 4.5%, When emerging and developing countries will soar to 6.6%.

Compared to the period after the financial crisis in 2008, when global growth recovered from -0.1% in 2009 to 5.4% in 2010, these figures represent the optimism of the IMF. However, the organization stressed that forecast data in 2021 will only be realized when the pandemic is under control, the measures to control the epidemic will be removed, and the confidence of consumers and investors will recover.