Vietnam’s economic growth inched up in the first half of the year, official figures showed Thursday, but experts warned of troubles ahead for the communist country.
Gross domestic product (GDP) grew 4.9 percent in the first half of the year, according to preliminary data released by the General Statistics Office, compared to 4.38 percent for the same period in 2012.
Corporate difficulties, a banking system weighed down with bad debts and high interest rates were among the main factors contributing to the weak economic climate, the office said.
Vu Dinh Anh, deputy director of the state-backed Institute of Economy and Finance, said the level of growth was “appropriate” as the economy entered a period of “gradual recovery”.
“Despite this first positive sign, the Vietnamese economy will have to face many difficulties in terms of production and trade in the future,” he said.
Vietnam repeatedly raised interest rates in 2011 to prevent the economy from overheating and to rein in double-digit inflation, but as growth slowed to record lows, the authorities this year resumed monetary stimulus efforts.
Vietnam’s inflation hit 6.69 percent year-on-year in June, marking the first increase in eight months after the government cut interest rates. Analysts said this was a sign Hanoi’s attempts to stoke demand were starting to show results.
Vietnam achieved a GDP growth rate of just 5.03 percent overall in 2012, the weakest in 13 years. The government has targeted economic growth of 5.5 percent for 2013.
Authorities are struggling to address widespread concerns about bad bank debts, falling foreign direct investment and a string of financial scandals among state-owned firms.
Vietnam economic growth up slightly in January-June
