Vietnam's economy to grow 6.2 pct in 2011: UN report

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Vietnam's economic growth, driven by strong exports and a buoyant domestic market, will reach 6.2 percent this year, but will be dogged by inflation, a UN report says.

According to the UN's 2011 Economic and Social Survey of Asia and the Pacific released Thursday, the projected growth is slightly lower than 2010's 6.8 percent.

The UN Economic and Social Commission warned that high inflation is a key challenge for Vietnam this year. "There are clear signs of overheating," the report said.

Inflation surged to a 28-month high of 17.51 percent in April, on the back of increases in fuel and electricity prices. Minister of Planning and Investment Vo Hong Phuc said earlier this week that the economy may expand 6.5 percent this year, while inflation by the end of 2011 may be similar to the 2010 figure of 11.75 percent.

The UN report says Vietnam's current account balance has improved, but its weak currency remains a concern. It also noted that unlike other regional countries, Vietnam's stock market did not benefit from strong capital inflows due to such risk factors as declining foreign exchange reserves, high inflation and a weak currency.

On the regional level, the UN report said developing countries in Asia and the Pacific will continue driving the global economy in 2011, but high food and fuel prices as well as volatile capital inflows would pose fresh challenges.

The report projects economic growth in the Asia-Pacific region at 7.3 percent in 2011, lower than 8.8 percent in 2010.

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