Workers at a plant in Việt Nam. The country's GDP is expected to be 5.4 per cent this year. — Photo tapchitaichinh.vn

HCM CITY — Việt Nam’s GDP is likely to grow by 5.4 per cent this year, according to the Global Economic Forecast Report from the Institute of Chartered Accountants in England and Wales and Oxford Economics. 

The ICAEW said the forecast has been revised downwards from the 7.6 per cent in its previous report.

The growth would accelerate to 7.5 per cent in 2022, with the pick-up driven by easing restrictions and industrial recovery gaining traction around mid-2022, it said.

Prospects remain dim in the short term for countries like Việt Nam, the Philippines and Thailand which continue to battle the spread of the COVID-19 virus.

Heavily export-oriented economies like Việt Nam remain dependent on the recovery of the manufacturing sector.

The spread of the highly contagious Delta variant has cast a shadow on Southeast Asia and limited economic recovery this year, especially for countries with low levels of COVID-19 immunity. 

Several economies are expected to contract in the third quarter, but the outlook in 2022 is more positive. 

Asian economies have experienced varying degrees of success in containing the Delta variant because of differing rates of vaccination and social distancing restrictions.

At one end of the spectrum, significant waves of infections in Việt Nam, Malaysia, the Philippines, and Thailand in the last quarter mean they face delayed recovery in 2021, but they should see a significant rebound in 2022 once vaccination rates are higher and lockdowns are lifted. 

Mark Billington, ICAEW’s managing director international, said: “The COVID-19 Delta variant has derailed the recovery process for most South-East Asian economies and the reality of living with COVID-19 as endemic is proving to be complex.

“Not only do governments have to implement appropriate restrictions and measures to curb the spread of the variant, but they also need to speed up their vaccination rollouts to achieve immunity, in order to improve their prospects for growth.”

Global GDP grew by 1.4 per cent in the second quarter of 2021, exceeding the rate of growth seen in the 15 years prior to the pandemic, including the pace of recovery seen after the global financial crisis of 2008. 

However, there are signs that momentum may be faltering, driven by tighter restrictions and concerns about the Delta variant, and supply chain disruptions that are affecting key sectors such as manufacturing. 

The report expects the global economy to expand by around 5.8 per cent in 2021 and 4.7 per cent in 2022. — VNS