Vietnam's economy picks up despite crisis and confrontation with Beijing
Hanoi (AsiaNews/Agencies) - Vietnam's economic growth picked up in the first half of the year, official figures showed Friday, indicating the effects of anti-Chinese riots over South China Sea claims were not as bad as feared.
In fact, Gross domestic product (GDP) expanded 5.18 per cent in January-June from the same period last year, according to General Statistics Office estimates, up from 4.9 per cent in the same period last year.
Last week the central bank also devalued the Vietnamese dong by 1 per cent to boost exports and face possible backlash from protests and plant burning in May.
Taiwanese and South Korean businesses were hit hardest by the violence, which saw factories vandalised and set ablaze.
Hanoi offered compensation to affected businesses by cutting tariffs and fast-tracking insurance settlements.
"The quickness with which they responded was striking," said Sudhir Shetty, a World Bank East Asia expert, who added that the authorities managed "to insulate the economic from the political".
Although the riots damaged Vietnam's reputation as a solid bet for foreign investors, in relative terms it is still pretty stable.
World Bank experts warned though that long-term challenges must be addressed, including sluggish domestic demand, a banking sector weighed down with high levels of toxic debt and record numbers of bankruptcies.
Other agencies are more bullish on Vietnam's future. On Thursday, Standard & Poor's said that the long-term outlook was "stable".
Vietnam's growth potential is robust, given an export manufacturing sector that is well-diversified and increasingly oriented toward higher value-added goods.
Prime Minister Nguyen Tan Dung said this month the country was targeting GDP growth of around 5.8 per cent this year, followed by 6 per cent in 2015 and 6.5 per cent a year for the following four years.
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