Mar 28, 2014
Vietnam’s growth slowed in the first quarter as the government failed to spur lending to businesses as banks struggled with bad debt.
Gross domestic product rose 4.96 percent in the first three months from the same period a year earlier, the General Statistics Office said in a release in Hanoi today. That compares with a previously reported 6.04 percent pace in the last quarter of 2013 and the median estimate of 5.2 percent in a Bloomberg survey of seven economists.
Vietnam’s policy makers are trying to bolster an economy that the World Bank estimates will grow 5.4 percent this year, slower than a government target of 5.8 percent, and a seventh straight year of growth below 7 percent. The central bank last week cut its policy rates and said it is stepping up efforts to create more favorable conditions for foreign investors, including a plan to auction bad-debt assets of banks.
“The economy is still very sluggish and facing challenges including weak domestic demand and slow bank lending,” said Nguyen Tri Hieu, a Hanoi-based economist at Ocean Commercial Joint-Stock Bank. “It’s hard for banks to accelerate credit growth now due to the burden of bad debt,” he said, adding that exports are a “bright spot” that will drive a recovery.
The dong was little changed at 21,102 per dollar as of 2:40 p.m local time. The benchmark VN Index (VNINDEX) rose 0.7 percent. It has gained about 17 percent this year, the biggest advance in Asia.
See more at Bloomberg