Vietnam will strive for annual growth of 6 percent in 2014, accelerating from 5.5 percent projected for this year, and aims to boost investment and reduce bad debts, the government said on Thursday.
It also will aim to cap annual inflation at 7 percent next year, Prime Minister Nguyen Tan Dung said in a directive seen on Thursday that ordered state agencies to start working on 2014 economic targets.
The government has an official inflation target of around 8 percent for this year but has hoped to keep it at 6.0-6.5 percent.
The directive provided no concrete details as to how Hanoi would breathe life into an ailing economy that expanded at its slowest pace in 13 years in 2012 and is still hamstrung by bad debt, a staggering amount of bankruptcies and slow retail and credit growth.
The government aims to boost domestic and foreign investment and ensure effective provision of credit, it said. The 6 percent stated was a target, not an official growth projection.
The Southeast Asian nation's economy grew an estimated 4.9 percent in the first half of 2013 from the same period last year, the General Statistics Office (GSO) said, confirming a government report released earlier.
Gross domestic product (GDP) in the second quarter ending June rose 5 percent from the same period last year, a slightly faster pace than seen in the first quarter.
"Production and business in the country are still facing difficulties, domestic market demand remains weak," the GSO stated in a report, adding that bad debts also weighed on the economy.
The government is under pressure to revive an economy which was once seen as one of Asia's rising stars.
One solution was setting up the Vietnam Asset Management Corporation (VAMC) to buy bad debt from troubled banks as of next month, in return for special bonds that would help boost lending.
The central bank has lowered its policy rates twice, on March 26 and May 13, each time by 1 percentage point, to help struggling businesses.
It is expected to cut rates by a further 50 basis points in the third quarter, Standard Chartered Bank said in a recent report.
The goal of 6 percent growth for 2014 was overly optimistic given the current state of the economy, said Vu Thanh Tu Anh, director of research at the Harvard Fulbright Economics Teaching Program in Ho Chi Minh City.
"It's not really practical. The economy is weak, with more than 200,000 registered bankruptcies in the past two years. Firms have low productivity and exports are heavily dependent on the global economy," he said.
"These are just three reasons to reconsider that goal."