Vietnam’s GDP is expected to grow by 8 percent this year - Illustrative image (Photo: VNA)Hanoi (VNS/VNA) - Southeast Asia’s economic growth will rebound to6.2 percent in 2021 with Vietnam achieving 8 percent growth, according tothe latest economic outlook report from Oxford Economics commissioned by chartered accountancybody ICAEW.
GDPacross the region contract by 4.1 percent in2020, with countries that had been successful in controlling theCOVID-19 pandemic like Vietnam and Singapore leading the recovery.
Indeed,Vietnam was expected to be the only economy to record positive growth in 2020.
Therebound was in part due to the low-base effect of 2020, but policies were setto remain very accommodative with extensive fiscal support and low interestrates.
Prolongedlockdowns and social distancing measures in the region were forecast to capglobal GDP growth in 2021, making it unlikely that a return to pre-COVID GDPand trade activity would take place before late 2021.
InSoutheast Asia, growth would likely be constrained by social distancingmeasures, but restrictions would continue to be eased over this year,especially in economies that would be able to roll out vaccines relativelyquickly.
Aneconomic rebound in 2021 remained contingent on the easing oflockdown restrictions, global recovery momentum and the successful roll-out ofvaccines.
Progresson vaccination would be an important barometer for growth, with services likelyto catch up faster in economies better placed with regard to vaccineprocurement and distribution.
SoutheastAsia experienced a three-speed recovery, with differences primarily driven bythe varying success of countries’ ability to contain fresh waves ofinfection and implement lockdown exit strategies to safely reopen theireconomies and fiscal and monetary policy support.
MarkBillington, ICAEW regional director, Greater China and South-East Asia, said:“The biggest concern for Southeast Asian economies is keeping additionalwaves of infection at bay while gradually bringing society and economicactivities back to speed.
“Theinterconnectedness of the global economy means that countries will have to workcollectively to strengthen their pandemic response plans and address the dualchallenges of resuming business activities while keeping their peoplesafe.”
Despitethe predictions of an economic rebound in 2021, there remain majoruncertainties that could affect post-pandemic recovery, such as slow progressin the roll-out of mass vaccination programmes, a global second wave resultingin another global lockdown and a financial crisis leading to major economicdamage.
Optimistically,vaccine breakthroughs and post-election US stimulus could also speed upnear-term recovery and avoid long-term damage, the report said./.
VNA
