The coronavirus pandemic will continue to put the brakes on Vietnam's economy through the rest of 2020.

While Vietnam's handling of the COVID-19 outbreak has been among the world's best in terms of public health outcomes, the country has not escaped economic damage. Earlier this week, the Asia Development Bank (ADB) dropped Vietnam's GDP growth forecast for the year from 2.3% to 1.8%.

In June, the ADB's annual estimate for Vietnam stood at 4.1%, but the Da Nang outbreak created new pressure on growth, and severe ongoing virus situations in major economies such as the United States and European Union are also impacting smaller countries around the world.

Andrew Jeffries, the ADB's country director for Vietnam, told Việt Nam News that next year looks better, as growth "is expected to revive to 6.3% in 2021, supported by improved domestic consumption, increased disbursement of public investment, expanded trade with the European Union, China and other countries, and the re-allocation of global value chains into Vietnam."

Meanwhile, Reuters reports that the central government has set growth targets of 2–2.5% for 2020, and 6.7% for 2021.

Additionally, while Vietnam's 2020 GDP growth will pale in comparison to last year's robust 7% expansion, the nation is still performing far better than many of its regional peers. Nikkei Asian Review reports that 34 of 46 developing Asian economies are expected to contract this year, creating a regional recession for the first time in 60 years.

In Southeast Asia, Malaysia, Singapore, the Philippines and Thailand are all expected to see GDP contraction of over 5%, while India is forecast to contract by 9%. 

As a whole, the ASEAN region may shrink by 3.8% economically, after seeing 4.4% growth in 2019. The good news is that all of these economies are predicted to resume growth next year, assuming the pandemic does not worsen.

[Photo via Saigon Newport]