HA NOI (Biz Hub) — The ANZ Bank has downwardly revised Viet Nam's GDP growth outlook from 5.6 to to 5.1 per cent in 2013.

The bank said it now expected growth would remain below the long-term average of seven per cent as structural changes in the banking sector had put a lid on domestic activity.

"Despite the approval of the State's asset management company, we maintain our view that this is not enough to clean the domestic banks' balance sheets of non-performing loans," the report said.

ANZ said it believed that the Sate Bank would keep its benchmark refinancing rate on hold at seven per cent through this year. "The expected uptick in inflation in the medium term has decreased the scope of the central bank to ease the policy rate further," it said.

July inflation on a sequential basis rose by 0.27 per cent month-on-month, up from 0.05 per cent month-on-month in June. Monthly gains of 1.34 per cent in the transport component, this month's main inflation driver, reflect the recent hikes in pump prices.

July inflation on a sequential basis rose by 0.27 per cent month-on-month, up from 0.05 per cent month-on-month in June.

The bank held onto its 2013 forecast for average inflation to be at the low end of six to eight per cent forecast range. ANZ expected that inflationary pressures would slightly moderate by September due to favourable base comparisons.

"The sluggish domestic demand is expected to put a cap on consumer price gains over the short term," it said. — VNS