There is still growth in the Vietnamese economy and there is still optimism concerning that economy, but the economic picture must be viewed in the context of the worldwide COVID-19 pandemic.
Look at the two reports on Vietnam that came out in the first week of August, and one would be forgiven for a bit of whiplash. One report, from Nielsen, showed Vietnam is the second most optimistic out of 68 nations surveyed. The other, from Vietnam’s investment ministry, showed businesses closing at a record pace. Both outcomes are based on true narratives, even if disparate, about the Southeast Asian nation, reflecting the wild swings of fortune brought on by the COVID-19 pandemic.
Though COVID-19 is taking a toll on the economy, Vietnam climbed two spots in the Global Consumer Confidence Index released by Nielsen, a market research firm, on Aug. 5. The sanguine attitudes in the communist nation, even in the face of an unprecedented downturn, can be explained by three factors. First is that Hanoi quickly suppressed the disease like few states have done, reporting 964 infections and 24 deaths for all of 2020.
Second is that Vietnam’s star looks somewhat bright because the rest of the universe is fairly dim. The confidence index has been measured each quarter since 2005, but this is the first time it has registered a double-digit fall in consumer confidence ratings on average around the world, from one quarter to the next.
Travelers visit the night market on the Vietnamese island of Phu Quoc. (VOA News)
“Taken together, this implies that almost all consumers surveyed globally are pessimistic,” said a press release from Nielsen, which conducted the research in conjunction with The Conference Board, a think tank.
The world economy is forecast to shrink by 4.9% this year, according to the International Monetary Fund.
Third, Vietnamese people were more optimistic because they were surveyed in May, smack in the middle of a three month stretch without a reported local infection of the coronavirus.
“Vietnam was one of the first countries who controlled the first wave of the pandemic well and so stepped into the rebound phase,” Louise Hawley, the managing director at Nielsen Vietnam, said. “This meant that health was no longer the top one concern of Vietnamese in the second quarter of 2020.”
Those in the survey, however, did not know that Vietnam would later report its first ever COVID-19 death in late July. By the time their positive sentiments from May were reported in August, the pandemic had changed -- as just one example of the unpredictable nature of the ongoing global emergency. Vietnam is now working to suppress the second COVID-19 wave before the end of August.
At the same time, 31% of Vietnamese in the Nielsen survey were concerned about the economy in the second quarter, an increase from 21% in the first quarter of the year. Although Vietnam has one of the only economies in the world that will grow in 2020, the growth rate is likely to be the lowest in decades.
“We still expect Vietnam’s economy to post positive growth of 3.3% for calendar 2020,” ANZ, a banking and financial services company, said in a note. “However, the second wave of COVID-19 outbreak [poses] risks which may cap the recovery in domestic demand.”