ANZ is ‘skeptical’ of Vietnam’s economic growth surprise

ANZ is ‘skeptical’ of Vietnam’s economic growth surprise

Australia & New Zealand Banking Group Ltd. (ANZ) said it’s skeptical of official data showing Vietnam’s growth accelerated in the third quarter and will keep its full-year forecast below a target set by the government.

“We are skeptical of the strong growth print as most economic indicators are pointing to weaker growth data compared to their expansion over the same period last year,” Glenn Maguire, chief economist for South Asia, ASEAN and Pacific and Eugenia Fabon Victorino, economist for ASEAN and Pacific, wrote in a research note yesterday.

Vietnam’s economy expanded 6.19 percent from a year ago in the third quarter, boosting growth in the first nine months to 5.62 percent, government data showed last month. The January-September growth figure compared with a median estimate of 5.4 percent in a Bloomberg survey. The government’s full-year target is 5.8 percent for a seventh year of growth below 7 percent, the longest such stretch according to International Monetary Fund records going back to the 1980s.

Vietnam’s year-to-date average inflation of 4.61 percent shows “persistent weak local consumption,” while retail sales growth is slower, ANZ said. Vietnam’s average growth in industrial production so far this year is also weaker, it said. Inflation (VNCPIYOY) eased for a third month to 3.62 percent in September from a year ago, the slowest pace since October 2009. according to government data.

Prime Minister Nguyen Tan Dung said the 5.8 percent growth target is “achievable” this year, according to a statement on the government’s website last month. The World Bank estimates the economy will grow 5.4 percent while ANZ maintains its forecast at 5.6 percent.

The benchmark VN Index (VNINDEX) of shares fell 1.4 percent yesterday, the biggest decline since Sept. 18.

bloomberg