Upticks in manufacturing and exports helped Vietnam’s gross domestic product rise 2.62% year over year in the third quarter, accelerating the country’s economic recovery from a slowdown in the first half of 2020 that was caused by the pandemic.
Exports jumped 11% in the third quarter, thanks in large part to a 20% increase in exports of personal computers to meet a growing demand as students worldwide attend online classes and large parts of the global workforce continue to work from home. In September alone, exports jumped 18% compared to the same period last year.
“Along with China, [Vietnam] is the only major Asian economy expected to register positive growth in 2020,” said Priyanka Kishore, head of India and South East Asia for Oxford Economics.
Vietnam’s management of the coronavirus pandemic within its own borders has helped it reopen and resume economic activity. The Southeast Asian nation had not recorded a locally transmitted COVID-19 case in more than three months when a small outbreak in Danang, a beach city popular with local tourists, ended the streak in late July.
The highest daily tally during the second wave was 50 new cases, reported on July 31. On Aug. 9, Vietnam reported 29 new cases. The figures continued to drop in the second half of August before reaching zero on Aug. 30.
Vietnam brought cases down sharply with a swift and strict lockdown of Danang, restricted travel to the city, and widespread, targeted testing and contact tracing. Its daily new cases have ranged from zero to five this month.
Vietnam’s second wave “stalled the recovery somewhat,” Kishore said, but “the situation is already back under control.”
Vietnam’s 2.62% GDP increase in the third quarter is an improvement on the 0.39% year-over-year increase in the second quarter but remains several percentage points below the pre-pandemic third-quarter GDP growth of 7.31% in 2019.
The continued and indefinite loss of foreign tourists because of coronavirus travel restrictions has dented Vietnam’s economic recovery. Before the pandemic, tourism accounted for around 8% of Vietnam’s GDP, according to the World Bank.
The loss of foreign tourism is worse for countries like nearby Thailand, where tourism accounts for 14% of GDP. What’s more, Thailand lacks Vietnam’s status as a manufacturing hub that is sometimes touted as a supply-chain alternative to China.