Vietnamese
lawmakers approved a proposal that aims for annual economic growth of as much
as 7 percent through 2015 and seeks to quell Asia’s highest inflation.
The National Assembly backed an objective of
6.5 percent to 7 percent annual economic expansion from 2011 to 2015 and a goal
of reducing inflation to 5 percent to 7 percent by the end of that period,
Nguyen Thi Kim Ngan, the deputy chairwoman of the legislative body, said in
Hanoi Tuesday. The proposals were listed in a socioeconomic plan presented to the
assembly.
Vietnam has struggled this year with an
inflation rate of more than 20 percent, a trade deficit and slowing growth. The
nation’s banking sector is also experiencing a deterioration in loan quality,
capital, profitability and liquidity, Moody’s Investors Service said at a
conference in Beijing Tuesday.
“On inflation, 5 percent to 7 percent seems
pretty ambitious, even by 2015,” said Johanna Chua, Hong Kong-based head of
Asian economics at Citigroup Inc. “If they really want to achieve that, I’m not
sure that’s consistent with 6.5 percent to 7 percent growth, unless there are a
lot of structural changes such as liberalizing the service sector and reforming
state companies.”
The benchmark VN Index of stocks closed down
0.5 percent Tuesday. The dong weakened 0.1 percent to 20,996 per dollar as of
11:03 a.m. local time, according to data compiled by Bloomberg. The currency
was devalued by about 7 percent in February, the most since at least 1993, in
part to try and curb the trade gap. The stock index is down about 16 percent so
far this year.
Trade
deficit
Vietnam will aim for an annual trade shortfall
of less than 10 percent of the value of exports by 2015, according to the
socioeconomic plan. The deficit for the 10 months through October was $8.39
billion.
The assembly also approved a budget deficit
goal of less than 4.5 percent of gross domestic product by 2015 and a public
debt target of no more than 65 percent of GDP by the same year.
Vietnam’s inflation rate was 21.59 percent in
October, easing from 22.42 percent in September. The pace is the fastest in a
basket of 17 Asia-Pacific economies tracked by Bloomberg.
The Southeast Asian nation’s gross domestic
product may climb 5.8 percent in 2011, the slowest pace since 2009, Asian
Development Bank data show. The economy, a production hub for companies from
Intel Corp. to Honda Motor Co., expanded 6.8 percent last year.
Bloomberg
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