Vaccination important factor in Southeast Asia growth: Oxford Economics report
Vaccination important factor in Southeast Asia growth: Oxford Economics report
Progress in vaccination will continue to be an important barometer for growth in the second half of 2021 in Southeast Asia including Viet Nam, experts have said. 
In the latest economic outlook report from Oxford Economics (OE), commissioned by the Institute of Chartered Accountants in England and Wales (ICAEW), Mark Billington, managing director international, ICAEW, said: “We expect that countries which are able to contain new COVID-19 cases and reach high levels of vaccinations will outperform the rest of the region and be better placed for recovery.
“While most Southeast Asian economies have experienced a surge in COVID-19 cases since the start of 2021, leading to the reinstatement of social distancing measures, this has dimmed but not derailed economic recovery.”
According to the report, despite the recent resurgence in COVID, Viet Nam’s growth outlook remains optimistic and the economy is expected to return to pre-Covid levels by the second half of 2021.
The country’s GDP is forecast to grow at 7.6 per cent in 2021, among the highest rates in the region.
Viet Nam was one of the few economies in the world to grow in 2020 due to its success in containing the pandemic, the report said.
“This early success enabled the economy to benefit from the surge in global trade activity and enjoy strong foreign direct investment flows that boosted export-oriented and manufacturing industries.
“Singapore and Viet Nam are expected to continue leading the region in recovery. Despite a resurgence of COVID-19 cases in Viet Nam, which has affected its manufacturing sector and export industries, its economy is predicted to rebound swiftly once restrictions are lifted.”
Southeast Asia’s GDP would rebound strongly to grow at 4.8 per cent this year, after contracting 4.1 per cent last year, it said.
ICAEW and Oxford attributed the rebound to an improvement in global trade activities, accommodative policies, continued government fiscal support and low interest rates across the region, adding growth is forecast to improve to 6.5 per cent in 2022 as countries move closer to herd immunity and the recovery becomes more synchronised across sectors.
The report said Southeast Asian economies would continue experiencing varying speeds of recovery in 2021 driven by their ability to contain fresh waves of COVID infections and procure and distribute vaccines.
Uncertainties remain as rates of recovery depend on the progress of vaccine rollouts and whether the possibility of further lockdowns remains high in the near-term, it said.
However, the economic outlook is optimistic in the medium to long terms, it said.
Recent lockdowns in Singapore, Viet Nam and Malaysia mean household spending reduced in the second quarter of 2021, but it is unlikely to dip significantly since households and businesses are better equipped with digitisation to enable them to work and shop remotely, it said, adding Governments have also used more targeted measures than nation-wide lockdowns, which have minimised disruption.
