Vietnam's General Statistics Office (GSO) said growth fell to 3.1 per cent in the first quarter and stood at 4.46 per cent in the second quarter due to the effects of the global economic slowdown.

The economy grew 6.04 and 6.9 per cent in the third and the fourth quarters respectively thanks to the recovery of domestic consumption and exports, the GSO said.

The service sector led the way, expanding by 6.6 per cent, followed by the industry and construction sector with 5.5 per cent, while forestry and fisheries only grew 1.8 per cent.

The GSO also said the country's exports amounted to 56.7 billion dollars in 2009, down 9.5 per cent compared with last year, while the country's imports were 68.7 billion dollars, down 14.9 per cent. Vietnam's trade deficit reached 12 billion dollars in 2009, down 14.9 per cent compared to last year.

The inflation rate was 6.9 per cent, much lower than last year's 25.2 per cent, the GSO said.

Vietnam, one of Asia's fastest-growing economies, grew 6.2 per cent in 2008 following 8.5-per-cent growth in 2007.

Deutsche Presse Agentur - December 31, 2009

Vietnam growth accelerates in fourth quarter

HANO – Vietnam’s economy grew at its fastest pace in nearly two years in the final quarter of 2009 and the government put preventing hyperinflation atop of its list of challenges for next year.

Economists expect further monetary tightening as inflation accelerates but the central bank, keen to cement the recovery, said last week it was keeping interest rates unchanged in January.

Full year gross domestic product (GDP) grew 5.32 per cent, its lowest rate since 1999 and about two percentage points below the average of the past decade, hobbled by soft demand for exports and weak investment, the General Statistics Office said on Thursday.

But in the fourth quarter the stimulus-fuelled economy leapt 6.9 per cent from a year earlier, the quickest pace since the first quarter of 2008, compared with 6.04 per cent growth in the third quarter. The economy expanded 4.8 per cent in 1999.

The statistics office said in its annual report economic growth had been accelerating since the third quarter this year.

“Even though there were many limitations and shortcomings, the results achieved in 2009 affirm that our nation’s economy has passed the most difficult period,” it said in a statement.

The government had expected 5-5.5 per cent growth. Next year’s official target for GDP growth is 6.5 per cent.

In the face of accelerating growth, the government said it must “firstly continue to actively prevent the return of hyperinflation and the existing potential inflationary factors”.

Annual inflation picked up to 6.52 per cent in December, its highest since April, from 4.35 per cent in November, the government said last week. Last year, inflation topped out at about 28 per cent in August when the economy overheated.

Inflation for 2009 stood at 6.88 per cent in 2009.

The central bank raised interest rates and devalued the currency in late November in what economists said was a clear signal Hanoi was committed to maintaining macroeconomic stability. Last week, it announced that rates would stand pat in January despite calls for further monetary tightening.

The statistics office’s number two task for the coming year was to “seize the opportunity of the global economic recovery to strengthen exports”.

The trade deficit narrowed to $12.25bn from last year’s $18.03bn, but exports fell about 10 per cent.

Lower commodity prices helped bring export revenues down, even though some expanded. For instance, rice exports rose by more than 25 per cent, but revenues fell 8 per cent.

Crude oil exports fell about 2.4 per cent in volume, but revenue from what has traditionally been Vietnam’s biggest foreign currency earner slumped 40 per cent in 2009 compared with 2008, the statistics office said.

Reuters - December 31, 2009