Vietnam to focus on stabilizing economy, inflation

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The Vietnam government's top priorities are to implement measures to stabilize the economy, control inflation and to ensure a return to "solid economic growth," Deputy Prime Minister Nguyen Sinh Hung said Thursday.

"General socioeconomic conditions in the first months of 2010 continued to improve and inflation is still under control," Hung said in the opening speech of the National Assembly meeting in Hanoi. "The macroeconomic situation is not really stable as it is facing new difficulties and challenges."

The government is targeting annual growth of 7.5 percent to 8.5 percent over the period of 2011 to 2015. The country will encourage exports to narrow the trade deficit and increase foreign currency reserves, Hung said, adding Vietnam will try to achieve its economic growth target of 6.5 percent for this year.

Gross domestic product in the Southeast Asian nation of 86 million people increased 5.8 percent in the first quarter from a year earlier. The economy expanded 5.3 percent last year.

"Growth is most likely to head up for the remainder of the year," Wellian Wiranto, a Singapore-based economist at HSBC Holdings Plc., said in a research note this month. He expects the economy to expand 7.2 percent this year.

Vietnam will try to gradually bring down interest rates as credit growth in the first four months of this year was low, Hung said.

The Vietnamese government has asked lenders to reduce interest rates and requested that the central bank keep the exchange rate at a "reasonable level" as it seeks to buoy the economy after last year's global recession.

Vietnam earlier this month raised its 2010 inflation forecast to 8 percent from 7 percent. The consumer price index rose 9.46 percent in March from a year earlier, the fastest pace in a year, before gains eased to 9.23 percent last month.

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