HispanicBusiness

Vietnam's gross domestic product grew 5.03 per cent this year, lower than last year's increase of 5.89 per cent, the General Statistics Office said Monday, as domestic consumption declined, small businesses folded as credit dried up and exports were hurt by the sluggish global economy.

The rate, the slowest since 1999, missed the government target of 5.2 per cent despite government efforts to encourage investment by slashing key interest rates.

Key interest rates were raised last year as part of measures to curb double-digit inflation. The higher rates reduced the number of loans and investments, putting the brakes on Vietnam's economic expansion.

Despite years of rapid growth, Vietnam's economy has been hampered by bad debts, corrupt state-owned enterprises and high inflation.

This month, year-on-year inflation reached 6.8 per cent, down from November's rate of 7.08 per cent.