* Vietnam forecasts slowing growth at 4.31 pct in H1
* HSBC says Vietnam set for lowest annual growth since 1999
* Inflation continues to ease-govt
* Lending in 2012 to rise 12-13 pct to encourage growth
(Adds HSBC forecast, quote)
By Ho Binh Minh
HANOI, June 15 Vietnam's economic growth is
forecast to slow to an annual pace of 4.31 percent in the first
half of this year, even though second-quarter growth accelerated
to an estimated 4.5 percent, Deputy Prime Minister Nguyen Xuan
Phuc said on Friday.
Vietnam was continuing to win the battle against inflation,
with the consumer price index rising an estimated 3 percent in
the first half, the lowest rate for the period in three years,
Vietnam has been struggling with the highest inflation in
Asia, peaking at 23.02 percent in August 2011. The government is
targeting 7-8 percent for the year, with May inflation at 8.34
percent, the first fall below 10 percent since October 2010.
"Our economy has step by step passed a very difficult
period, despite many barriers and challenges ahead," Phuc told
a televised National Assembly session.
Hanoi is targeting annual GDP growth around 6 percent, but
HSBC on Friday forecast annual 2012 growth at 5.1 percent.
"Vietnam is likely to have its lowest growth number since
1999 this year," said Hong Kong-based HSBC economist Trinh
Rating agency Standard & Poor's on Wednesday raised its
outlook on Vietnam's sovereign rating to stable from negative,
citing its renewed confidence in the country's price stability.
Vietnam will pump more cash into its economy in the second
half of this year to help ease the funding burden faced by
businesses so far this year, which would lead to annual credit
growth of 12-13 percent for the whole of 2012, Phuc said.
Around 21,800 firms shut operation or closed down in the
first five months of 2012, up 9.5 percent from a year ago, he
Between July and December, the government will pump 21
trillion dong ($1 billion) from state budget investment into the
economy, translating into a credit growth of 2 percent per
month, along with loans from commercial banks, Phuc said.
Vietnam initially aimed for an annual lending expansion of
15-17 percent, against growth of 14.4 percent last year, but
loans have been growing very slowly so far this year, partly due
to high interest rates and banks trying to avoid bad debt.
In May, lending in Vietnam had a positive growth for the
first time after a negative expansion between January and April,
Phuc told the parliament.
The Vietnamese government will speed up the restructuring
process of banks, "adopting quick measures to deal with bad debt
in the banking system and corporate bad debt", Phuc said.
(Editing by Michael Perry)