The economy grew at a modest pace of 5.18% yoy in 1H14 on encouraging strength in manufacturing sector despite sluggish credit growth of 2.3% ytd in the banking system. With domestic demand still weak, inflation remain subdued at <1% giving the SBV leeway to devalue the dong by 1% in a bid to support exports which has been quite robust; the ytd trade surplus stands at US$1.3bn.