HANOI: Vietnam’s economy grew 5.3 percent on-year in the third quarter, official data showed Friday, though experts warned it was on course to miss an ambitious year-end target.

Loan interest rate reductions, an extension of tax payments and increased public investment had a positive impact, the General Statistics Office (GSO) said.

But analysts warn it will be an uphill battle for the clothing, shoes and electronics manufacturing hub to reach a year-end target of 6.5 percent expansion for 2023.

“Vietnam would only reach a year-end economic growth of between 4.5 percent and 4.7 percent, much lower than the government’s set target,” Rong Viet Stocks Company chief economist Tran Thi Ha My told AFP.

“Growth for the fourth quarter is expected to be at around six percent… largely thanks to improved industrial production and exports.”

According to GSO, a slump in demand hit the country’s exports.

One of Vietnam’s largest shoemakers for brands such as Nike, Adidas and Reebok announced in August it would cut jobs for the third time this year.

Vietnam earned nearly $260 billion in the first nine months from exports.

The communist state has long been a success story among Asian economies and in 2022, its economy grew eight percent.

The Asian Development Bank predicts 5.8 percent growth for Vietnam’s year-end figure, “mainly due to weak external demand.”

“Weak external environment, including from a subdued recovery in the People’s Republic of China, has hampered export-led manufacturing, thus shrinking industrial production in Vietnam,” the bank’s Vietnam country director Shantanu Chakraborty said this week.

“The economy remains resilient, and recovery is expected to pick up in the near term, driven by strong domestic consumption, which is supported by moderate inflation, an acceleration of public investment and improved trade activities.”

The GSO reported that 776,000 more laborers in Vietnam have found jobs since the beginning of the year, compared with the same period last year.

Average monthly income was around $288, nearly seven percent higher, GSO said.