Vietnam's $260 billion economy has grown 6 percent or more each year since 2012 because of an increase in manufactured exports. Vietnamese officials say the economy will grow just 2 percent in 2020. That is down from an earlier target of 2.5 percent. The Asian Development Bank estimates that the economy will expand at a rate of just 1.8 percent this year.
Experts say measures taken around the world to contain COVID-19 have reduced orders to Vietnamese factories that make shoes, clothing and furniture.
Stay-at-home rules in Western countries are keeping people away from physical stores. Business closures in those countries have left people out of work and less likely to buy non-essential goods.
Frederick Burke is a partner with the law office Baker McKenzie in Ho Chi Minh City. He told VOA, "The rule is that those light industrial goods are weak, the exports orders are down and there's reports of a lot of unemployment in the factory sector in the [Vietnamese] provinces."
Vietnamese factories that make electronic products still get orders from companies that sell overseas to people working or studying at home. However, most factories that make non-essential goods are failing, Burke said.
For example, one Vietnamese factory operated by a Taiwan-based company dismissed 150 workers earlier this year. That information comes from the nonprofit Business & Human Rights Resource Centre.
Vietnam has closed its borders to limit the spread of COVID-19. The border closure is stopping investors from making trips that would help them expand. They would normally travel to Vietnam from Japan, Singapore, South Korea and Taiwan to search for new places to manufacture goods.
Jack Nguyen is a partner with Mazars, a business advisory service, in Ho Chi Minh City. He said that Vietnam's tourism industry has also been badly affected by the restrictions on travel. Foreign tourism usually makes up 6 percent of the Vietnamese economy.
"Things will only pick up only when the borders are open and there's no quarantine requirements," Nguyen said. "Who knows when that's going to be."
Experts say a COVID-19 outbreak earlier in Danang, followed by the start of the school year, has reduced travel within Vietnam. Some of the country's hotels are up for sale as a result, Nguyen noted.
The Ministry of Planning and Investment says it could take as long as four years for the world economy to recover from the effects of COVID-19. The ministry set a 2021 growth target of 6 percent to 6.5 percent, down from an earlier goal of 7 percent.
However, foreign investors in the country are not looking elsewhere. Frederick Burke said that those investors believe Vietnam's economy will survive the effects of the coronavirus health crisis.
Ralf Matthaes is founder of the Infocus Mekong Research group in Ho Chi Minh City. He says Vietnam's government "has proven to the world thus far that it can protect its borders from the invasion of a pandemic and create a desirable atmosphere for investment." He added that that is something most other Asian nations cannot say.
I'm Jonathan Evans.