There is a sense of economic growth in Ho Chi Minh City that is as powerful and enduring as the heat haze that wafts up from its streets.

Vietnam's largest city, formerly Saigon, is characterised by thousands of students and young office workers tearing across town on mopeds.

Many of them ride shiny new machines, a symbol of the rise of the country's growing mass affluent.

Jousting perilously with cars and taxis, they provide a noisy accompaniment to the hooting in what has become the country's de facto financial capital.

But look closely and there are signs of the effects of a wider economic malaise as soaring interest rates and a potentially catastrophic worldwide increase in fuel and commodity costs have prompted fears of a growth slowdown in Vietnam.

Last month inflation hit 25 per cent, threatening interventionist interest rate rises from the Government.

The local cost of borrowing has reached 13 per cent, but experts predict the Government may lift rates as high as 18 per cent as it tries to cool the overheating economy.

Stock markets have halved since the beginning of the year and Vietnam has become the worst performer of the world’s emerging economies.

Property prices have fallen by 40 per cent in the past three months.

Bank customers withdraw wads of a hyper-inflating currency that is often worth less than the paper it is printed on.

After Moody's Investors Service cut its outlook on the country last week, Vietnam has received downgrades from all three of the main credit rating agencies in recent months.

The downturn has been swift and severe. Barely five months ago, Vietnam was celebrating stock markets at their second highest level.

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