Vietnam’s economic growth target of 6.5% this year may be at risk amid a global slowdown weighing on exports, lingering crisis in the local property sector and higher interest rates hampering businesses, according to lawmakers.

This year’s forecast expansion is proving to be “challenging” after a weak gross domestic product growth in the first quarter and as the construction sector and capital markets continue to face financial difficulties, National Assembly’s head of economic committee Vu Hong Thanh said at the opening session of the parliament Monday in Hanoi.

Lawmakers also reiterated calls for the central bank to consider more policy rate cuts and for banks to bring lending rates lower to aid businesses. There are 104 trillion dong ($4.4 billion) worth of bonds due in the third quarter alone, which may present “hidden risk to the markets,” Thanh said.

State Bank of Vietnam has reduced its key rates twice this year after GDP slowed to 3.32% last quarter while exports shrank in three of the past four months, reflecting the risks that global and domestic challenges pose to one of the region’s fastest-growing economies.

“The world economic situation continued to decline, consumer demand in our main markets dropped sharply due to inflation, geopolitical tensions, and countries’ tightening monetary policies,” National Assembly Chairman Vuong Dinh Hue said.

Vietnam, which rarely posts less than 5% GDP growth before the pandemic, is taking a hit from slowing global demand exacerbated by funding woes amid the government’s anti-graft campaign that’s deterred investors. Vietnam’s exports make up more than 100% of the economy, making it one of the most trade-dependent nations in the world.

“Property market and its businesses continue facing so many difficulties in liquidity, cash flows with many late in paying bond principals and interests,” Thanh said.

At the same time, business activities in manufacturing, especially among small and medium enterprises are impaired by declining global orders, Deputy Prime Minister Le Minh Khai said in his speech.

Fitch Ratings said last week that while property sector risks have made operating conditions more difficult for banks in Vietnam, “liquidity crunch is easing and the banking system is likely to avert a sharp slowdown,” thanks to response of policymakers and lenders.

--With assistance from Cecilia Yap, Linh Vu Nguyen, Nguyen Dieu Tu Uyen, Aradhana Aravindan and Mai Ngoc Chau.