Vietnam's growth foundations solid: IMF

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The foundations for sustained growth remain solid over the medium term provided Vietnam maintains its sound macroeconomic policies, the International Monetary Fund said in a new statement published Thursday.

Vietnam's current account deficit is projected to widen slightly, but will be covered by continued strong direct investment inflows, the statement said. Meanwhile, reserves are also expected to recover, though they would still be at a low level.

The IMF cautioned, however, that the positive scenario depends on "steadfast implementation of stabilization policies and, if necessary, stepped-up measures to restore confidence in the dong."

"In contrast to the emphasis on growth in the past few years, the authorities' priority is now shifting to restoring macroeconomic stability," it said.

The government had announced in late February a comprehensive stabilization package with measures to cut credit growth and reduce the budget deficit.

The IMF statement said output growth in 2011 is expected to slow to around 6.25 percent. Inflation is projected to rise to about 13.75 percent by end-2011 before declining to 6.25 percent by end-2012.

Monthly inflation in June rose 1.09 percent from May. June's consumer price index went up 20.82 percent on a year-on-year basis, official statistics showed.

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