Vietnam revises inflation target to 15 percent

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Vietnam has made its second revison to inflation and growth forecasts in less than a month as price pressures are expected to intensify for at least another month.

Nguyen Xuan Phuc, head of the government's office, told a press briefing on Friday that the annual inflation target has been raised to 15 percent for this year while the new economic growth target is 6 percent.

The revision comes quite soon after Planning and Investment Minister Vo Hong Phuc said in early May that gross domestic product may expand 6.5 percent this year. Inflation could stand at 11.75 percent by year-end, he said.

Vietnam's government originally aimed to keep inflation at 7 percent this year. Consumer prices, however, kept surging over the past few months, rising 19.78 percent in May compared to a year earlier.

The World Bank said on Thursday that Vietnam's inflation could accelerate to 22 percent in June before easing to 15 percent by the end of the year. After that the country will be able to regain its economic stabiliy, the bank noted.

In late February, the government had unveiled a series of policies to curb inflation and stabilize the economy.

Phuc said on Friday that the government would continue to try and cut public investment and narrow trade deficit. It will also help local companies solve their difficulties and ensure enough credit suppy for exporters, he said.

He said monetary policies have proved effective as the dong has become stable and the central bank was able to buy 1.2 billion of US dollars for its foreign reserves.

Phuc said total pledges of foreign direct investment in the first five months were only US$3.5 billion, or less than half compared to the same period last year.

According to the Ministry of Planning and Investment, foreign investors are facing difficulties dealing with rising global prices. They are also cautious because Vietnam's economy has not stabilized yet.

Regarding an incident last month in which Chinese marine surveillance vessels cut exploration cables of PetroVietnam's Binh Minh 02 ship, Phuc said the ship has continued its exploration actitivies.

Vietnam will take necessary measures to protect foreign investors and experts operating in the exclusive economic zone of the country, he said.

At Friday's press briefing, Minister of Agriculture and Rural Development Cao Duc Phat said the government plans to develop a sea patrol fleet to protect Vietnamese seafood resources. The state budget will allocate more than VND1.5 trillion ($73 million) for this fleet, while 26 coastal provinces will spend VND580 to build their own patrol ships.

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