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.

Agence France Presse - September 29, 2016

Vietnam may miss growth target this year

The economy is likely to expand 6.3 percent, lower than the previous forecast of 6.7 percent, they say.

Vietnam's government officials on Friday said that the economy may miss the target for gross domestic product (GDP) growth this year, following soft numbers in the first nine months.

“It is estimated that the GDP growth for 2016 will be from 6.3-6.5 percent, but most likely it will be 6.3 percent,” Vice Minister of Planning and Investment Dao Quang Thu said at a government meeting on Friday.

The government previously set the 2016 growth target at 6.7 percent.

Nguyen Thi Hong, the central bank's deputy governor, agreed it is unlikely that the original target could be reached.

She said for the economy to grow 6.5 percent by the end of the year, growth in the fourth quarter must be 8.3 percent, which is improbable considering the range of 5.6-7 percent in previous years.

Officials reassessed the initial target after data showed that the economy grew 6.4 percent in the third quarter, below the 6.87 percent rate seen in the same period last year.

The GDP growth for the first nine months stood at 5.93 percent, also down from 6.53 percent a year ago.

The Asian Development Bank earlier this week revised its growth forecast for Vietnam from 6.7 percent to 6 percent.

Adverse weather, including drought in the Central Highlands coffee belt and salination in the Mekong Delta food basket, have affected industrial and agricultural production as well as Vietnam's export and import sectors, Reuters has reported.

By Toan Dao - VnExpress - October 1, 2016