IMF: Vietnamese economy to see full recovery in 2021

Rice is one of Vietnam's major agricultural products for export to the EU (Photo: VNA)

Elsewhere in the region, it is anticipated that Singapore, the Philippines, and Thailand will all see their economies struggle to fully recover.

Business website Nikkei compiled the IMF's country-based projections in order to calculate real gross domestic product, setting 2019’s figures as a baseline of 100.

In line with this, Vietnam, Indonesia, and Malaysia all scored above the 100 mark for the projections ahead in 2021, thereby meaning that their respective economies are expected to expand next year compared to the level before the novel coronavirus (COVID-19) outbreak in late 2019.

Most notably, Vietnam nation is forecast to lead the group, with a projected growth index of 108.4. Indeed, S&P Global predicts that the Vietnamese economy will expand 10.9% in real terms ahead in 2021, more than any other country in the Asia-Pacific region, following a 2.91% rise recorded this year.

According to Nikkei, the country was also the only one of the six to witness real economic growth this year due to its swift and thorough success in curbing the spread of COVID-19.

"Many global companies are flocking to Vietnam, which is seeing boon in its exports," says Yuta Tsukada of the Japan Research Institute.

Given the typical low production costs in Vietnam, Tsukada believes that more companies will follow the trend of shifting operations from China, particularly if the trade war between the United States and China continues.

Furthermore, Indonesia came second with a growth index of 104.5. Whilst, Singapore, the Philippines, and Thailand are not expected to exceed the 100 mark until 2022.

According to Nikkei, despite differences in terms of their inpidual forecasts, all six countries could be impacted by global developments relating to COVID-19, in addition to the policies of US President-elect Joe Biden after he takes office on January 20.