Edward Teather, a senior ASEAN economist from the Union Bank of Swizerland (UBS), has recently hailed Vietnam as one of the “brightest” spots throughout Asia despite COVID-19 challenges, adding that the national economy now looks poised to rebound.
“Retail sales, imports and industrial production were all actually up on-year in the month of June, which is better than you can say for most economies in the region,” he told CNBC.
This comes after many regional economies contracted during the second quarter of the year in comparison with a year ago, in contrast, the country’s gross domestic product grew slightly at an estimated 0.36%.
The senior expert applauded Vietnam’s success in containing the COVID-19 situation despite sharing a border with China, the place where the virus was said to originate from.
The country has reported a total of 369 cases and no deaths during the pandemic so far, according to data compiled by Johns Hopkins University, out of a population of just under 100 million.
“Vietnam is growing and is well-positioned to continue to take a global market share in terms of exports going forward, so pretty bright prospects exist in a relative sense in the region,” Teather added.
The economist emphasised that Vietnam can be viewed as an alternative manufacturing hub for companies that are keen to shift production from China due to tensions between Beijing and Washington that have resulted in rising tariffs between the two superpowers.
Moreover, the country’s free trade deal with the European Union, commonly known as the EVFTA, could boost inflows of foreign direct investment following its ratification last month, Teather noted.
In addition, Teather anticipated that overall FDI levels are likely to be hindered, in part because financiers cannot travel freely, adding that there remains “plenty of activity” in the pipeline, with investments potentially picking up in 2021 as border restrictions are eased.
He underscored the importance of Government support in boosting the Vietnamese economy, noting that the Prime Minister has recently called for additional measures to be put in place in an effort to reboot the economy, while the central bank has stated their aim of achieving credit growth of over 10%.