Taking Stock, July 2020 : What Will Be the New Normal for Vietnam? The Economic Impact of COVID-19
As of early July 2020, life in Hanoi appears to be back to normal or close to what it used to be before the COVID-19 (Coronavirus) pandemic. The government’s policy helped contain the virus and contributed to saving human lives. Today, most social...
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| Format: | Report |
| Language: | English |
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World Bank, Hanoi
2020
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| Online Access: | http://documents.worldbank.org/curated/en/101991595365511590/Taking-Stock-What-will-be-the-New-Normal-for-Vietnam-The-Economic-Impact-of-COVID-19 http://hdl.handle.net/10986/34268 |
| Summary: | As of early July 2020, life in Hanoi
appears to be back to normal or close to what it used to be
before the COVID-19 (Coronavirus) pandemic. The government’s
policy helped contain the virus and contributed to saving
human lives. Today, most social distancing measures have
been lifted. However, this rapid return to normality may
prove to be illusory. Several economic and financial
indicators have not yet bounced back to their precrisis
levels, including the gross domestic product (GDP) growth
rate that, at 1.8 percent in the first semester of 2020, was
approximately 5 percentage points lower than its historical
trajectory during recent years. The pandemic has also left
indelible scars, especially on people and businesses that
were the least prepared for such a shock. A closer look at
the streets of Hanoi reveals that some hotels and shops
remain closed, while others have simply disappeared. This
report argues that Vietnam should not envision a return to
the old normal, but rather should define what will be the
new normal as the pandemic has changed in so many ways how
people live, work, and communicate. The new normal for
Vietnam will depend on many factors, but it will be to a
large extent shaped by the way the government manages the
exit of the COVID-19 pandemic. Because the country will
operate in a world with a great deal of domestic and
international uncertainty for the foreseeable future, new
drivers of growth will be required, including a new role for
fiscal policy. Yet, by being ahead of the curve, Vietnam has
a unique opportunity to increase its footprint in the world
economy and to push ahead with its agenda of reforms so it
can accelerate its quest to become a high-income economy in
the foreseeable future. |
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