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Vietnam Q2 GDP growth accelerates, but exports slow

Vietnam economic growth Reuters/Kham
Women work at a garment export factory in Hung Yen province, Vietnam

Vietnam has reported faster economic growth in the second quarter, driven by the services sector and despite a slump in exports.

Gross domestic product in the second quarter grew 4.14 percent from a year earlier, the General Statistics Office (GSO) said in a report on Thursday.

Vietnam, a regional manufacturing hub, has been trying to prop up its economy during slowing global demand. The central bank has cut its policy rates four times so far this year.

The country is a key exporter of electronics, wood items, garments, textiles and footwear.

Q2 exports fell 14.2 percent from a year earlier and imports fell 22.3 percent.

However the services sector grew 6.11 percent in the second quarter, agriculture increased by 3.25 percent, and manufacturing and construction expanded 2.5 percent.

“The government’s policies to encourage domestic consumption and promote tourism have contributed to the growth of the services sector,” the GSO said.

Retail sales of goods and services in the first half of this year rose almost 11 percent from a year earlier, while average consumer prices in the period rose 3.3 percent.

The country is targeting GDP growth of 6.5 percent this year, slower than last year’s expansion of 8 percent.