Vietnam aims to keep inflation rate at 18 pct for the year

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The government will continue tightening monetary policies and take other measures to achieve a growth rate of six percent and keep inflation rate at around 18 percent for the year, a senior official told the press Thursday.

According to Vu Duc Dam, head  of the Government Office, the country's gross domestic product (GDP) growth was 5.57 percent in the first eight months, while the consumer price index (CPI) increased 0.93 percent in August, which was the year's lowest increase.

The government has ordered agencies to discuss anti-inflation measures further this month to curb the annual figure at one digit next year and make a breakthrough in 2013, he said.

The annual inflation target has been continuously revised this year, and the last one was 17 percent.

Dam said that Vietnam will also continue tightening public investment by cutting down on expenditure and re-organizing plans to focus on urgent works or those that are in their final phases.

Finance Minister Vuong Dinh Hue said the government has allowed his ministry to revoke all wrongly distributed state budget and bonds from various localities.

It is calculated that VND2 trillion (US$96 million) will be withdrawn in the immediate future, he said.

The ministry has pledged that it will keep budget overspending to  4.9 percent of GDP instead of the 5.3 percent  ordered by the National Assembly, Hue said.

With Vietnam's public debts increasing, the ministry has also asked its debt management department to review the country's borrowings from 2006 to 2010 and come up with a better, safer strategy for 2011-2020, the minister said.

As of December 2010, Vietnam's public debt was equal to 56.7 percent of the GDP and was expected to be some 58.7 percent at the end of this year, according statistics previously reported by the debt management department.

Asked about businesses' foreign debts that the government has agreed to guarantee, Hue said the state-owned shipbuilder Vinashin, which had accumulated debts of more than $4 billion, has to be responsible for its debts. The government will only support it to boost production and earn profits, he said.

Meanwhile, four cement businesses have found it impossible to repay their debts totaling $382 million, Hue said.

He said these businesses will have to liquidate their properties to pay off the debts, and the government will pay the remaining amount.

As of August 31, the government had guaranteed 16 projects in the cement industry with nearly $1.4 billion in debts, Hue said, stressing that his ministry has proposed to Prime Minister Nguyen Tan Dung that the government stops issuing guarantees to all cement projects and review the functioning of the industry as a whole.

Also at the press conference, officials said the government will keep tightening gold and foreign currency markets as well.

Nguyen Van Binh, governor of the State Bank of Vietnam, told Thanh Nien that the government has approved in principle a project to mobilize gold from people at beneficial and safe interest rates to stabilize gold market.

He said while the bank allowed businesses to import 15 tons of gold last month to cool local soaring prices, so far they have imported just seven tons.

According to Dam, another important order from the Prime Minister has been to tighten monitoring of mineral mining. They plan to suspend licensing mining projects for reviewing them, he said.

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