Domestic consumption continues to be critical to boost economic recovery (Source: VNA) Hanoi (VNA) – Vietnam could expect the strong growth of recent years toreturn next year, and will likely see its position as an offshoring locationreinforced once the global economy begins to recover, assessed the Mckinsey& Company, a global management consulting firm.
In a recent article titled “Emerging fromthe pandemic, Vietnam must position itself for recovery,” the author said thatVietnam has gone through more than two months without community transmissions,which enables the country to be among the first to fully reopen its domesticeconomy.
“Vietnam has faredbetter economically than many countries,” it wrote. GDP growth in the firstquarter was at its lowest level since 2010, although it was still in positiveterritory at 3.8 percent.
As exports and tourismhave been severely affected, domestic consumption will continue to be criticalto boost economic recovery.
According to thearticle, manufacturing has a crucial sector for Vietnam’s growth, leadingVietnam to achieve one of the highest trade-over-GDP ratios in Southeast Asia.
Amid the COVID-19outbreak, key steps have been taken to keep operations running despitelockdowns in other countries. For example, the article said, engineers from twomajor international electronics manufacturers were allowed to enter Vietnamearlier this year to ensure their factories continued to run at full capacity.The government also collaborated with local businesses to ramp up production ofpersonal protective equipment (PPE) for essential workers, helping them to gainaccess to global markets.
As manufacturersacross the globe start to rethink their supply-chain strategies to address thefrailties exposed by the pandemic, Vietnam remains in a strong position, itwrote, adding that the country has long been an attractive offshoringdestination.
A McKinsey survey offashion-sourcing executives published in May showed that 24 percent ofrespondents said they expect to see an increase in production in Vietnam morethan any other location in Asia.
“If Vietnam cancontinue its enviable record of keeping community transmission of COVID-19 atbay while also making the right structural shifts to drive growth over the nextdecade, it could not only recapture its pre-COVID-19 economic position butdrive new economic growth,” the article said./.
VNA
