Vietnam will experience a moderate economic recovery this year, Standard Chartered Bank has said in a report released on April 22.

The forecast dismissed the subdued start to 2013, with GDP growing 4.9 percent year-on-year in the first quarter, down from 5.5 percent growth in the previous quarter.

The weak GDP growth number was consistent with data released earlier, which indicated sluggish credit growth, retail sales, visitor arrivals, and industrial production.

The report said the economy normally pick up after Q1, when business activity is distorted by the Lunar New Year festival.

Retail sales grew 11.7 percent in Q1, the slowest pace since 2005. Last year it had grown at 21 percent.

On a more positive note, vehicle sales has shown tentative signs of improving, which could indicate a rebound in retails sales in the next few quarters.

Manufacturing growth was also sluggish in Q1, averaging 5.5 percent. But it rebounded to 5.6 percent in March after contracting 10.1 percent in February.

Industrial production was likely to pick up this year thanks to a supportive policy environment and an investment recovery.

In the external sector, trade performance was volatile in Q1 but there was a surplus of 328 million USD.

Export grew 21 percent during the period. The pace of export growth, though slightly lower than a year earlier, was much higher than that of Vietnam ’s ASEAN peers.

Import growth surged to 21 percent in Q1 from 15 percent in the previous quarter, indicating improving local demand.

The trade sector would maintain its positive momentum in 2013 given recovering global demand and a moderate pick-up in the domestic market. This should also strengthen the country’s external position.

Inflation eased in March to 6.6 percent from 7 percent in February. Core inflation slowed to 11.3 percent form 12.2 percent.

But food prices could be a potential upsides risk to inflation given the large weighting for food in the CPI basket (39.93 percent).-VNA