A seaport in Vietnam (Photo: VNA)HCM City (VNS/VNA) - Vietnam will emerge fromthe pandemic the least affected of all countries in Southeast Asia, though itis not immune to the sharp slowdown in trade flows, according to a report bythe Institute of Chartered Accountants in England and Wales and OxfordEconomics.
The “Coronavirus global outlook: After theOutbreak” report says most regional economies will fall into recession inthe first half of 2020 due to the severe impact of the outbreak.
However, growth is expected to spring back to anaverage of 8 percent in 2021, supported by fiscal stimulus packages andmonetary easing.
An enduring COVID-19 outbreak will see world GDPshrink by 4.7 percent in 2020, more than double the impact of the globalfinancial crisis in 2008 and the biggest recession in post-war history.
Similarly, most Southeast Asian economies willfall into recession in the first half of 2020 and record a 1.9 percentcontraction for the year.
Measures to lock down countries and cities inthe region to varying degrees have substantially cut domestic demand, with manycountries bringing in restrictions on exports of food produce to safeguarddomestic food supplies, further dampening export growth.
Thailand is forecast to be one of the worst hit, because tourism and travel,which have particularly suffered because of the pandemic, account for 20percent of its GDP.
The adverse impact on Southeast Asia will ease in the secondhalf of 2020 as Chinese import demand and global trade recover at a consistentpace, while a slower pace of normalisation will continue to weigh ontourism-dependent economies.
Co-ordinated fiscal stimulus packages andmonetary easing by authorities across the region will support the recovery ineconomic growth.
Mark Billington, ICAEW regional director,Greater China and South-East Asia, said: “Beyond a global health and economiccrisis, the pandemic is also an important chapter of an unfolding biggerinter-connected catastrophe of climate emergency, massive bio-diversity lossand increasing inequality.
“Our recovery will need to include sustainablesolutions that benefit nature, society and economy. As countries in the regiongradually ease lockdown restrictions and start to open their economies,organisations and businesses will have to adapt to a ‘new normal’ for sustainedgrowth and performance in the post-outbreak world.”
At the regional Virtual Economic Forum hosted by ICAEW onJune 4, industry leaders discussed the impact of COVID-19 on businesses in theASEAN region, and panellists shared their viewpoints on the impact of thepandemic on Southeast Asian economies and the recovery outlook.
Vietnam is poised to benefit from a manufacturing shift bymultinational companies though the impact of the slowdown on global demand thatwould continue to weigh on its supply chains and manufacturing sector./.
VNA
