Many sectors facing negative growth during drawn-out recovery

Growth recovery in many sectors in Vietnam will be slow due to the high number of new daily Covid-19 infections, low vaccination rates, and supply chain disruptions. according to a report from VnDirect.

It forecast that Vietnam’s GDP growth in 2021 will stand at 3.9 per cent, of which growth in the fourth quarter will be 5.7 per cent year-on-year. The report also implies that the slow recovery may extend throughout the fourth quarter, until the number of new daily infections falls significantly and vaccination rates are higher.

In aviation, domestic flights could be permitted again from the end of September, and Vietnam may pilot reopening some tourist areas such as Phu Quoc Island to international tourists from October.

The service industry is forecast to decline 0.02 per cent in the second half of the year compared to the same period of last year. Sectors such as hotels and tourism, warehousing and transportation, entertainment and arts, and administrative support services may post negative growth in the second half.

In agriculture, forestry, and fishery, VnDirect forecast that growth will only reach 3.6 per cent in the second half due to falling domestic consumption amid the pandemic.