* Vietnam may outdo target with 7.2% growth
May 4, 2010
HO CHI MINH CITY) Vietnam’s economy may expand 7.2 per cent this year, the fastest pace since 2007 and more than the government’s target, according to HSBC Holdings Plc.
Gross domestic product in the South-east Asian nation gained 5.8 per cent in the first quarter. The government is targeting growth of 6.5 per cent in 2010, which compares with a decade-low 5.3 per cent in 2009.
Vietnam’s first-quarter growth rate has been ‘significantly weaker’ than other quarters over the past decade, with the historical tendency for the economy’s pace of expansion to accelerate through the year, Wellian Wiranto, a Singapore-based economist at HSBC, said in a research note received yesterday.
‘Growth is most likely to head up for the remainder of the year,’ Mr Wiranto wrote. ‘The regional trade recovery should bode well for the strength of Vietnam’s industry sector.’
Industry and construction accounted for 43 per cent of Vietnam’s economy in the first quarter, while services made up 42 per cent. Retail sales have been growing at an ‘unceasingly strong’ pace, Mr Wiranto wrote.
‘With wage increases scheduled for government employees as well as those in private sectors such as textile manufacturing, consumption should stay supported,’ he wrote.
In addition to exceeding the government’s target, a 7.2 per cent pace of growth would also be faster than the 6 per cent forecast from the International Monetary Fund and the 6.5 per cent expected by the World Bank.
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