Vietnam posts steepest quarterly GDP fall in history

September 29, 2021 | 13:41

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As a result of pandemic restrictions, Vietnam's GDP fell 6.17 per cent in the third quarter of 2021, the biggest quarterly drop on record.

Vietnam posts steepest quarterly GDP fall in history

COVID-19 has had a substantial impact on the Vietnamese economy

The General Statistics Office (GSO) said that this is the first time since 2000 that Vietnam records negative quarterly GDP growth. The decline is attributed to the tough pandemic policies across many localities over the past three months.

Authorities have been enforcing strict measures for months. Factories had to temporarily cease operation if they fail to provide the COVID-19 bubble for their workers to work and live on site while locals were restricted in their access to basic activities like grocery shopping. As a result, the industrial and construction sector contracted 5.02 per cent while the service sector fell 9.28 per cent from the same period last year. As an impact of this contraction, in the first nine months of 2021, Vietnam's GDP only increased by 1.42 per cent over the same period last year, which will greatly affect the implementation of the growth target this year, GSO noted.

A number of international organisations have also lowered forecasts on Vietnam's economic growth. The World Bank lowered Vietnam’s outlook by 2.2 percentage points to 4.8 per cent. Meanwhile, S&P Global slashed its outlook for Vietnam by 3.1 percentage points to 4.2 per cent and the Asian Development Bank also lowered its growth forecast by two points to 3.8 per cent.

According to forecasts from the Ministry of Planning and Investment, full-year growth could be between 3.5 and 4 per cent, well below the government's initial target of around 6.5 per cent.