Governments around the world face a difficult choice in managing the COVID-19 outbreak: the need to balance the medical health of their citizens and the economic health of their countries as they decide how quickly to re-open their economies. Chief Economist Michael Kokalari looks at the factors governments – including Vietnam’s – will use as they consider this important decision.
Vietnam has, by all accounts, done a stellar job of “flattening the COVID-19 curve”, earning praise from around the globe. How has Vietnam achieved these encouraging results? Chief Economist Michael Kokalari takes a brief look at some of the measures that have been implemented and discusses why Vietnam’s economy will be less affected than many of its neighbors.
It has been more than a month since VinaCapital’s Chief Economist Michael Kokalari first published his views about the possible economic impact of the COVID-19 outbreak. With the situation rapidly evolving since then and the impact intensifying, Mike has cut his forecast of Vietnam’s GDP growth to 4%, and provides a comprehensive analysis of when and how he expects the country’s economy to ramp up later this year.
The spread of COVID-19 has led to a sharp correction in global markets and can be seen as “event-driven” (a one-off shock) and/or a “black swan” (unexpected and catastrophic). Vietnam’s standing remains fundamentally strong(er), yet t its stock market has not been spared from the sell-down seen in the rest of the world. Ismael Pili, VinaCapital’s Head of Research, states that renewed interest in the Vietnamese stock market may have to take its initial cue from developments outside its borders, which he expects will come in three stages: addressing the health scare, expansionary monetary policy on a global and coordinated scale, and robust fiscal stimulus programs.
The unofficial value of the VN Dong depreciated by about 1.7% last week, and by about another 1% today to circa VND 23,900 to USD 1. The VN Dong is now down about 3% YTD, which is a bigger drop than expected, but is a smaller depreciation than that seen by most of Vietnam’s regional peers. Read more why our Chief Economist Michael Kokalari believes the USD-VND exchange rate should stabilize around the current level.
The Philippines closed its stock market for two days due to the rapid implementation of “enhanced quarantine” measures in response to COVID-19. Ismael Pili, VinaCapital’s Head of Research, explains why he expects Vietnam’s stock markets will continue to operate even as the country manages the virus outbreak.
It’s been about a month since COVID-19 (novel Coronavirus) first came to light, and we now have enough information to forecast how it might affect the economy. Chief Economist Michael Kokalari offers his analysis of and opinions around which sectors will be hit hardest and the overall impact on Vietnam’s growth this year and beyond.