Vietnam expansion slowest since 1999
- Published: 25/12/2012 at 09:59 AM
- Online news:
Vietnam's economy expanded at its slowest pace in 13 years in 2012 as bank lending and domestic demand eased.
Gross domestic product rose 5.03% this year, the General Statistics Office said in Hanoi on Monday, down from 5.89% in 2011 and the slowest since the 4.77% in 1999. GDP increased 5.44% in the fourth quarter from a year earlier, up from a revised 5.05% in July-to-September.
Vietnam's economy has been hampered by slower lending as banks grappled with rising bad debt and under-capitalisation. The central bank this month cut benchmark interest rates for a sixth time this year, saying the adjustments are to help companies cope with difficulties in production and business.
It was only explosive credit growth that allowed for the level of economic growth that Vietnam had previously been achieving, said Edwin Gutierrez, a portfolio manager at Aberdeen Asset Management in London, which manages about US$11 billion (330 billion baht) in emerging-market debt, including Vietnamese bonds. The slower pace of expansion this year was the result of a slump in bank lending, he said.
Prime Minister Nguyen Tan Dung said on Dec 10 expansion may reach 5.2% this year, down from earlier targets of as much as 6.5%. Credit growth through October was 3.48%, compared with a full-year target of 8% to 10%, the Vietnam Investment Review reported Nov 26.
Vietnam's dong is up almost 1% versus the dollar in 2012. The benchmark VN Index of stocks has risen nearly 14%, heading for its first annual advance since 2009.
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