Vietnam’s Strong Recovery from Covid-19

Vietnam’s Strong Recovery from Covid-19

Vietnam is currently showing strong signs of recovery, following the Covid-19 pandemic. Over recent months, Vietnam has experienced the top economic growth rate within the region and now, despite an uncertain global economy, the government have set hopeful and ambitious growth rate targets for the year ahead.  

Vietnam recorded their first Coronavirus cases on the 28th January, and from February 1st flights were cancelled, visas suspended, and tourists prevented from entering the country. Likely drawing from their experience of the SARS virus in 2003, Vietnam have fared comparably well throughout the pandemic, despite sharing a border with China and neighbouring, more developed countries reporting cases by the thousands.  

While Covid-19 has impacted the world significantly, Vietnam have managed to contain the virus comparably successfully. Although remaining vigilant, the government have introduced incentives and offered financial assistance in order to encourage economic growth, isolation orders have been lifted and businesses allowed to reopen and resume business.  

In contrast to many other countries still in lockdown, Vietnam lifted isolation measures at the end of April having recorded only 335 cases, and 0 deaths, to date (18th June 2020). Precautions have been taken by the government in order to maintain Vietnam’s low infection rate such as limiting the number of people allowed to gather in one place at any one time, as well as wearing face masks being made mandatory. Consistent testing and contact tracing have also contributed to Vietnam’s relatively successful containment of Covid-19. 

Vietnam’s Strong Recovery from Covid-19

Vietnam’s Prime Minister, Nguyen Xan Phuc, spoke on the country’s anticipated economic recovery; “the economy is now like a pressed spring which is ready to bounce up”. He also stated that “the World Bank has predicted that Vietnam will grow by 4.9% this year. In the first quarter, the economy grew 3.82% year-on-year. Though it was a 10-year first-quarter low, it remains a relatively high growth rate in the global common context.” 

Forecasters have also predicted that the Vietnamese economy would rebound strongly in 2021 thanks to a surge in domestic production following the Covid-19 pandemic. The World Bank projected economic growth in Vietnam will bounce back to 7.5% next year and converge at around 6.5% in 2022.  

A key factor in this projected success is the growth of Vietnam’s middle-class population, one of the fastest growing in Southeast Asia. This, combined with consistent public investment in the country’s businesses and the large number of bilateral and multilateral trade agreements that involve Vietnam, means that the government’s expected economic growth looks likely.  

Despite the impact around the world, Vietnam has remained resilient. Experts believe this is largely down to preparation, and the country having acted quickly and decisively at the very beginning of the pandemic. Although some measures taken were deemed to be drastic, such as the quarantine camps set up for travellers arriving in the country to isolate in for 14 days, Vietnam has been praised heavily for their handling of the outbreak.   

National University of Singapore professor Vu Minh Khuong not only expects that foreign investment will rise as predicted, but also that many businesses may move or re-allocate resources to Vietnam following Covid-19. He said that "thanks to the pandemic, Vietnam has made leapfrogging progress in digital transformation. The rate of online transactions in public services increased from 12% to 24% during the two-month lockdown." 

Vietnam has proven their ability to handle such a threat in a way that other countries, even those far more developed or with much higher GDP’s have failed to. With business in the country picking back up, Vietnam hope to capitalise on their newly earnt trust by creating partnerships and attracting foreign investment.  

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