Vietnam's growth eases off in third quarter

Vietnam's growth eases off in third quarter

HANOI - Vietnam's economy dipped slightly in the third quarter year-on-year, data showed Thursday, but analysts say the communist country will remain one of Southeast Asia's star performers.

Vietnamese labourers sit waiting for employers to hire them for the day, on a roadside in Hanoi. (AFP photo)

GDP growth in the three months to September hit 6.4%, down from 6.81% in the same period in 2015, the Government Statistics Office said in a statement.

Vietnam has become a magnet for private investment in the region, especially in the manufacturing and consumer sectors, driven in part by a rapidly growing middle class with money to burn.

But cumbersome state enterprises, banking scandals and growing public debt have pegged back the economy.

Third quarter growth rose from 5.78% in the previous quarter and 5.48% in the first, official data said, as foreign investment and exports rose and agriculture recovered after a devastating drought.

Analysts still view Vietnam as a bright spot in the region.

Neighbouring Thailand, once the star of Southeast Asia, has by contrast seen its economy sputter under a military junta.

"We expect Vietnam to remain a growth outperformer, bucking regional weakness in trade," Eugenia Victorino, an economist at Australia & New Zealand Banking Group in Singapore told Bloomberg News.

"Reforms are slowly instituted which should prop up potential growth further in the medium term."

Vietnam has promised to privatise its bloated state-owned sector, and last month announced it would divest its majority stakes from leading government-owned brewers Sabeco and Habeco.

Lower than expected growth rates clocked in the first half of this year were blamed on a crippling drought that hammered Vietnam's rice and coffee farmers.

Mass fish deaths blamed on an industrial accident along the coast that devastated key fishing communities also dented progress.

The country has set a GDP growth target of between 6.5% and 7% by the end of 2016.

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