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Vietnam is one of the few economies that is still expected to grow in 2020 despite the pandemic. Longer term, Vietnam’s private sector, which currently employs 83% of the workforce, will be a key driving force of the Vietnam economy, says Le Hoang Vu, Head of Equity, Eastspring Investments, Vietnam.
According to Vu, Vietnam’s limited Covid-19 infections to date and the relative resilience of its economy have been held up as an example of how a developing country can successfully fight the pandemic. While the Vietnamese economy recorded a decade-low GDP growth of 3.68% in 1Q20, it beat consensus expectations by delivering mildly positive growth (+0.36%) in 2Q20. The IMF forecasts that the Vietnam economy will grow 2.7% in 2020, one of the handful of economies that will deliver positive GDP growth in 2020.
As the impact of the pandemic diminishes, Vietnam’s economy is forecasted to rebound strongly to grow at 7% in 2021. While domestic demand and the government’s easing measures have boosted the resilience of the economy in 1H2020, Vietnam’s private sector will play a key role in its longer-term dynamism.
“A thriving private sector also creates a pipeline of companies that are potential candidates for listing, helping to maintain the dynamism of the Vietnamese stock market”, Vu argues.
Read the full insight at Eastspring.com/lu.
