Hanoi (AFP) – Vietnam’s economy surged more than seven percent in the third quarter according to data Friday, but officials warned the communist country may still fall short of its annual target.
Communist Vietnam has been one of the region’s best performing economies in recent years, fuelled largely by exports of cheaply made goods like Samsung phones and Nike shoes.
The middle class is also rapidly expanding in the country of 93 million people, lifting domestic spending across many sectors.
But growth dipped last year to 6.2 percent as the economy recovered from a major drought and a massive fish kill along the central coast.
GDP expanded 7.46 percent in third quarter of 2017 from the same period last year, according to the General Statistics Office (GSO), the strongest third quarter growth since 2010.
“Growth was largely driven by exports. Domestically, strong credit growth is supporting household spending and the real estate sector,” ANZ Bank said in an email to AFP Friday.
It was also a bump up from last quarter’s 6.28 percent growth and 5.15 percent posted in first three months of the year.
Overall growth for the first nine months of 2017 is 6.41 percent, the highest since 2015 but below the official annual target of 6.7 percent.
But the GSO chief warned the economy may struggle to hit that goal.
“Reaching this year’s growth target will be a challenge,” Nguyen Bich Lam said on state-run Vietnam Television.
The Asian Development Bank said earlier his month it expects annual growth to hold steady at 6.3 percent, even as some sectors have slowed.
“Despite the drop in mining and oil output, Vietnam’s economy continues to perform well, driven by its twin engines of export-orientated manufacturing and rising domestic consumption,” ADB Vietnam country director Eric Sidgwick said in a statement.
Economists have warned that soaring public debt and dodgy loans plaguing the banking sector are holding the economy back.
The government has vowed to tackle mismanagement in the corruption-riddled banking sector.
On Friday, some 51 bankers and businessmen were convicted in a massive fraud case, including former Ocean Bank director and PetroVietnam chairman Nguyen Xuan Son who was sentenced to death.