Vietnam cuts growth target amid inflation fight

TN News

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Vietnam on Thursday cut its economic growth forecast for 2012 to between 6.0 and 6.5 percent, saying it would miss some major economic goals, and vowed to battle Asia's fastest-rising inflation rate.

Prime Minister Nguyen Tan Dung said global economic uncertainty and domestic "weaknesses" posed challenges for Vietnam, which had previously forecast annual growth of 7.0 to 7.5 percent annually between 2012 and 2015.

Speaking at the opening ceremony of the second session of the communist country's 2011 National Assembly, Dung said Vietnam's gross domestic product target for this year would remain at 6.0 percent.

But he warned the government would not achieve some major economic goals for this year, including stabilizing the economy and taming inflation.

"The macro economy is unstable, inflation remains high... and the restructuring of the economy is slow," he told delegates, giving a 2012 inflation target of below 10 percent.

Long focused on growth, Vietnam has this year shifted its attention to stabilising an economy beset by double-digit consumer price rises, dwindling foreign reserves and a weakening currency.

Officials have ushered in a series of measures, including raising key interest rates, vowing to cut state spending, and ordering that loan growth stay below 20 percent.

In September, Prime Minister Dung asked relevant agencies to work towards a year-end inflation rate of 18 percent, with the figure standing at 22.4 percent year-on-year in September.

Both the International Monetary Fund and Asian Development Bank project a year-average of almost 19 percent inflation for Vietnam.

Economic growth eased slightly to 5.76 percent year-on-year in the first nine months of 2011, compared with 6.54 percent in the same period of 2010, according to an official estimate.

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