Logo of Phnom Penh Post newspaper Phnom Penh Post - ADB: outbreak to cost Vietnam 0.41% of GDP

ADB: outbreak to cost Vietnam 0.41% of GDP

ADB: outbreak to cost Vietnam 0.41% of GDP

Vietnam is forecast to lose some 0.41 per cent of GDP due to the novel coronavirus outbreak, according to the latest report by the Asian Development Bank (ADB).

Under ADB’s report titled The Economic Impact of the Covid-19 Outbreak on Developing Asia released late last week, Vietnam’s damage was much better than that of other Asian countries and economies, ranking ninth after Taipei (0.44 per cent), Singapore (0.57 per cent), Mongolia (0.74 per cent), mainland China (0.76 per cent), Hong Kong (0.85 per cent), Thailand (1.11 per cent), Cambodia (1.59 per cent) and the Maldives (2.05 per cent).

According to ADB, there are several channels through which the Covid-19 outbreak will affect economic activity in developing Asia and the world. These include a sharp but temporary decline in domestic consumption in China and other outbreak-affected economies, and possibly investment if the outbreak affects views on future business activity; declines in tourism and business travel; spillovers of weaker demand to other sectors and economies through trade and production linkages; supply-side disruptions to production and trade (which are distinct from demand-side shocks spilling over through trade and production linkages); and effects on health such as increased disease and mortality as well as shifts in healthcare spending. Each of these is taken in turn.

ADB says developing members that will be significantly affected are those with strong trade and production linkages with mainland China. In addition to tourism-dependent economies, other developing Asian economies such as Hong Kong (China), Mongolia, the Philippines, Singapore, Taipei (China) and Vietnam will be materially affected by the Covid-19 outbreak. Many of these economies see a significant share of tourists from mainland China and are affected through that channel as well.

“The magnitude of the economic losses will depend on how the outbreak evolves, which remains highly uncertain. The range of scenarios explored in the analysis suggests a global impact in the range of $77 billion to $347 billion, or 0.1 per cent to 0.4 per cent of global gross domestic product,” ADB said in the report.

In a moderate scenario, where precautionary behaviours and restrictions such as travel bans start easing three months after the outbreak intensified and restrictions were imposed in late January, global losses could reach $156 billion, or 0.2 per cent of global GDP. Mainland China would account for $103 billion of those losses – or 0.8 per cent of its GDP. The rest of developing Asia would lose $22 billion, or 0.2 per cent of its GDP.

“There are many uncertainties about Covid-19, including its economic impact,” said ADB Chief Economist Yasuyuki Sawada.

“This requires the use of multiple scenarios to provide a clearer picture of potential losses. We hope this analysis can support governments as they prepare clear and decisive responses to mitigate the human and economic impacts of this outbreak.”

VIET NAM NEWS/ASIA NEWS NETWORK

MOST VIEWED

  • Without shoes or a helmet, a young cyclist steals the show

    Pech Theara gripped the curved handlebars of his rusty old bike, planted his bare feet on its pedals and stormed as fast as he could towards the finish line. The odds were against him as the 13-year-old faced off against kids with nicer bikes at

  • Phnom Penh-Sihanoukville expressway on schedule

    The construction of the more than $1.9 billion Phnom Penh-Sihanoukville Expressway has not been delayed despite the Covid-19 pandemic, with more than 26 per cent of the project completed and expected to finish in about two years, according to Ministry of Public Works and Transport secretary of

  • Over 110 garment factories close

    A government official said on November 22 that at least 110 garment factories had closed in the first nine months of the year and left more than 55,000 workers without jobs – but union leaders worry those numbers could be much higher. Ministry of Labour and Vocational Training undersecretary

  • Singapore group seeks $14M in damages from PPSP over ‘breach of contract’

    Singapore-based Asiatic Group (Holdings) Ltd is seeking a minimum of $14.4 million relief from Cambodia Securities Exchange (CSX)-listed Phnom Penh Special Economic Zone Plc (PPSP) for allegedly breaching a power plant joint venture (JV) agreement. Asiatic Group’s wholly-owned Colben System Pte Ltd and 95 per

  • PM vows to protect Hun family

    Prime Minister Hun Sen has vowed to continue his fight against opposition politicians who he said intend to smash the Hun family. Without naming the politicians but apparently referring to former leaders of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), Hun Sen said there

  • Cambodia lauded for fight against Covid-19

    Cambodia has drawn global accolades for its handling of the Covid-19 pandemic, with a new report finding that the Kingdom has controlled the pandemic better than any other country in Asia. Dr Takeshi Kasai, director of the World Health Organisation’s (WHO) Western Pacific region,