Vietnam’s economy slowed in the first quarter of 2016, official figures showed, hampered by low oil prices and an ongoing drought that has hit the agricultural sector hard.
The dip followed a record surge in economic growth last year, the peak of a five-year boom fueled by a flurry of international interest in the communist country.
The first three months of 2016 saw GDP growth drop to 5.46 percent, down from 6.12 percent for the same period last year, according to data released by the General Statistics Office.
“Cold spells in the north, drought… had a major impact on domestic production, especially agriculture, industry and exports during the period,” GSO director Nguyen Bich Lam told the official VietnamPlus news website.
Lower global oil prices have also weighed on growth, affecting the country’s income from crude production, independent economist Le Dang Doanh told AFP.
“The price of the global crude oil, a lengthy holiday for Lunar New Year (in February) and a slide in the price of agricultural products” have all affected growth, he said.
Crude oil exports have accounted for around one tenth of state income in the past, according to Bloomberg News.
Inflation was also up in the first quarter, by 1.25 percent against that of 2015, according to GSO figures.
Earlier this week, the government said it was aiming for growth of between 6.5 and seven percent by the end of 2016, still in the range of last year’s record 6.68 percent.
“If there are no further efforts on economic reforms, the government may not be able to meet the set target,” economist Doanh said to AFP.
Communist Vietnam is part of the Trans-Pacific Partnership, the world’s largest free trade deal between 12 nations, including the US and Japan, which is grinding slowly toward ratification.
But many analysts say Vietnam’s economic progress remains vulnerable due to high public debt, inefficiencies in the sprawling state-owned sector and rampant corruption.