Hanoi (VNA) – Vietnam’s growthprospects will depend on how well and how quickly the authorities will bringthe new coronavirus outbreak under control and how quickly international andnational vaccinations will proceed, according to the World Bank (WB).

In its Vietnam Macro Monitoring report issuedearlier this month, the WB said January’s industrial production index jumped by24.5 percent year on year, the highest growth rate since the beginning of 2019.Merchandise exports and imports respectively grew 51.8 percent and 41.8 percentfrom the same period last year.

The preliminary January goods trade surplus isestimated at 1.1 billion USD. Exports to the US and China continued the robustgrowth of 2020 while those to the EU, ASEAN, Japan and the Republic of Korea(RoK) bounced back strongly. Similarly, imports from the RoK, ASEAN and the USjoined those from China, Japan and the EU to stay in expansionary territory.

In the first month of 2021, the Government spenta total of 99.6 trillion VND, which is slightly, 1 percent, higher than a yearago. Public investment reached 15 trillion VND, making the disbursement rate of3.25 percent.

However, the WB added, while Vietnam’s economyhas been extremely resilient to the COVID-19 crisis, preliminary results fromthe COVID-19 World Bank high frequency household survey of January show thatalmost half of households still reported lower household income than the yearbefore. About 9 percent of households took loans and 15 percent reduced theirconsumption.

If persistent, this prudent behaviour willnegatively affect aggregate domestic demand in the future, according to thebank.

It held that growth prospects for 2021 will beaffected by how well and how quickly the authorities will bring the newoutbreak under control and how quickly international and national vaccinationswill proceed. 

If the crisis lingers, the authorities mayconsider further monetary and fiscal support. Yet, special attention will haveto be given to the fiscal space, the health of the financial sector andpossible social effects as lasting loss of income among some households maycreate new inequalities and tensions, the report noted.

Jacques Morisset, WB Lead Economist for Vietnam, said the WBexpects with many positive signs like the considerable progress in vaccinedevelopment and gradually resumed trading activities, the country can obtaingrowth of 6 percent in 2021./.