VIETNAM's economic growth forecast has been revised to 5.3 per cent this year as Covid-19 infections in the country remain high and the economic slowdown in its major export markets.
The World Bank revised the 2022 figures for the second time after it first projected last October that Vietnam will have a growth rate of 6.5 per cent. It then lowered it to 5.5 per cent in January.
Citing a World Bank report, the Vn Express daily said Vietnam's GDP was expected to grow by 5.3 per cent this year and it will stabilise at around 6.5 per cent when movement restrictions are further eased domestically and internationally.
The Bank also forecasts the service sector to gradually recover during the year as consumer confidence is restored and tourism resumes from mid-2022 onward as the country has reopened to foreign tourists.
However, the manufacturing sector is expected to grow at a slower pace due to similarly slower growth in Vietnam's main export markets that comprises the United States, the European Union and China.
The report also warned of an outlook of heightened risks from external economic shock, including the Russia-Ukraine conflict and new Covid-19 variants.
These could slow down the recovery of domestic demand, and labour shortage due to a surge in infections.
"Additional shocks could lead to a low case scenario where the GDP grows 4 per cent in 2022, recovering to 6 per cent and 6.5 per cent in 2023 and 2024, respectively".
The World Bank has also recommended that the Vietnamese government deploy a strong fiscal policy support, and accommodative and prudent monetary policy.
It was also cautious about economic and human capital consequences from inequality, which went up during the pandemic and lockdowns between last May and September.
Vietnam's economy grew by 2.6 per cent last year, well below its pre-pandemic trend of 7 per cent.