Vietnam economy expands 6.5pc in first half of '08

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HANOI, July 1 (AFP): Vietnam's economy expanded 6.5 per cent in the first half of 2008 compared with the same period last year, the government said today amid concerns that rampant domestic inflation will hit growth.

The figure is lower than the 8.5 per cent achieved over the whole of 2007 and comes as some experts worry that the Vietnamese economy has overheated and may be sliding into a boom-and-bust cycle.

"Unfavourable global economic changes in the first six months of 2008, and natural disasters and epidemics in the country, had a negative impact on Vietnam's economic and social situation," the general statistics office said.

The economy grew 7.9 per cent in the first half of last year compared with the same period in 2006, according to official figures.

Vietnam has in the past been hailed as Asia's next economic tiger. But it has been battered by double-digit inflation, a ballooning trade gap, a tanked stock market and worries about the banking sector and its currency.

The government has made fighting inflation a top priority and pledged other economic fixes. But it has also lowered its 2008 economic growth target to seven per cent.