“A strong recovery is expected in 2021. Growth is projected to strengthen further to 6.5% as normalisation of domestic and foreign economic activity continues,” says Era Dabla-Norris, mission chief to Vietnam and division chief in the IMF’s Asia and Pacific department.
Dabala-Norris notes that the country’s fiscal and monetary policies moving forward are expected to remain supportive, although to a lesser extent than in 2020.
Most notably, the nation’s fiscal response has largely been focused on supporting vulnerable households and firms in need, says Dabla-Norris.
Monetary policy easing and temporary financial relief measures put forward by the State Bank of Vietnam (SBV) have served to alleviate liquidity pressure, lower the cost of funding, and has ultimately facilitated a continued flow of credit, she adds.
The anticipated growth of the Vietnamese economy comes after it expanded by 7% last year, according to IMF data.