Vietnam only Southeast Asian country poised for economic growth this year: IMF

Vietnam is the only Southeast Asian country identified by the International Monetary Fund (IMF) to be on track for economic growth this year, forecast at 2.4 percent.

The IMF attributed the country's decisive steps to contain the health and economic fallout from COVID-19 for its success.

Vietnam has had only 1,288 Covid-19 cases and 35 deaths.

The IMF is also predicting a 6.5percent growth for Vietnam in 2021, as the normalization of domestic and foreign economic activity continues.

Vietnam lacks the health infrastructure of wealthier countries but more than made up for it with astute public health measures that quickly brought COVID-19 numbers under control.

Among the measures was the timely development of testing kits, utilization of a combination of strategic testing, and aggressive contact tracing.

While Vietnam experienced slower economic growth this year with its badly hit, it has avoided the worst effects of the pandemic.

According to Michael Kokalari, the chief economist for Vinacapital, among the factors allowing the country to cushion the blow was the huge increase in the number of people working from home globally.

Consequently, it spurred demand for Vietnam-made laptops and office furniture.

Vietnam’s exports to the US increased by 23 percent in the first three quarters compared to the same period in 2019, with electronics exports up 26 percent.

The increase in labor costs in China and the ongoing US-China trade war also prompted many multinationals to start operating in Vietnam, including the likes of Apple and Samsung.

The pandemic also showed more companies to consider manufacturing in Vietnam due to the need to diversify their supply chains, noted Kokalari.