HANOI, March 29: Vietnam’s economic growth slowed to 4.0 per cent in the first three months of 2012, its slowest rate in three years as the government prioritised fighting inflation, official data showed on Thursday.

The rate was well down on the 5.57 per cent posted in the same period last year and the weakest since the 3.1 per cent notched in the first quarter of 2009.

Growth had been low as “all sectors and areas of the economy encountered difficulties in business, production and consumption, especially in the processing and manufacturing industry,” said the General Statistics Office (GSO).

It said business and production activities had been hit by high interest rates.

The industry and construction sector grew only 2.94 per cent in the January-March period, half of last year’s three-month figure of 5.71 per cent.

However, as the country had given more priority to restraining inflation, this growth rate was “logical”, the GSO said.

Last year, Vietnam started to refocus its efforts from economic growth to stabilisation to deal with price rises and other challenges, including dwindling foreign reserves, a yawning trade deficit and downward pressure on the dong currency.

Analysts however say the most pressing problem now is to avoid a situation of slow economic growth coupled with high inflation.

Inflation in fact slowed in March, with the consumer price index up 14.15 per cent, compared with 23 per cent at its peak in August last year.

Earlier this month, the State Bank of Vietnam slashed key interest rates for the first time in nearly three years in response to easing inflation.—AFP