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|Vietnam's economic outlook depends greatly on how the COVID-19 pandemic will play out, according to Standard Chartered. Photo: baodautu.vn|
The bank sees downside risks to the forecast – and a potential interest rate cut – if the economic impact of Vietnam’s COVID-19 outbreak is prolonged. Such a scenario could affect Vietnam’s external position.
According to Standard Chartered, GDP growth in the third quarter may likely have slowed to 1.9 per cent on-year, from 6.6 per cent in the second quarter, as the pandemic hit the economy.
Ealier this month, the bank had revised its GDP growth forecasts for Vietnam for 2021 to 4.7 per cent from 6.5 per cent and 7.0 per cent from 7.3 per cent for 2022 due to softening economic indicators, the worsening pandemic, and a still-slow vaccination rollout.
Standard Chartered anticipates a further downgrade and an interest rate cut by the State Bank of Vietnam if COVID-19 cases are not brought under control by September.
It sees a rebound in the fourth quarter and expects trade data to remain supported by improving global trade. Softer economic growth is expected in the third quarter of this year, Standard Chartered noted.