VNStockNews.com - Vietnam’s economy may expand 6.7 percent this year, surpassing the original government target of 6.5 percent as domestic production restores growth momentum and global trade recovers.
The country’s economy continues to “develop in a positive direction,” unnamed government members said in a statement. With the “obvious economic recovery,” gross domestic product growth in the third and fourth quarters is expected to be higher than the first two quarters, according to the statement, which was filed on the government’s website.
The value of industrial production exceeded 504 trillion dong ($26 billion) in the Jan. to Aug. period, an increase of nearly 14 percent on-year. GDP growth in the third quarter may reach 7.18 percent, according to the statement.
Gross domestic product in the Southeast Asian nation expanded 6.4 percent in the second quarter, after advancing 5.8 percent in the first three months of the year. Prime Minister Nguyen Tan Dung said in June the economy may grow as much as 7 percent in 2010.
Still, the government members said that global inflation pressures present challenges to the local economy.
Dong Devaluation
The State Bank of Vietnam lowered the dong’s reference exchange rate by 2 percent on Aug. 18, citing the need to narrow the trade deficit. The shortfall was $900 million in August from a revised $978 million in July, an Aug. 24 report showed.
Companies are still finding it hard to access funds because of high borrowing costs, according to the statement. Vietnam’s central bank said last week it would keep its benchmark interest rate unchanged for a ninth consecutive month in September as it strives to boost lending.
Vietnam is preparing a “rapid and sustainable” development strategy for 2011 to 2020 that will lead to average GDP growth of 7 percent to 8 percent a year for the period, the prime minister said last week.
The Southeast Asian nation’s economy may expand 7.2 percent this year, the fastest pace since 2007, according to HSBC Holdings Plc. That would be faster than the 6 percent forecast from the International Monetary Fund.
Inflation cooled for a fifth month in August, with consumer prices climbing 8.18 percent from a year earlier compared with 8.19 percent in July, according to data from General Statistics Office in Hanoi. (Bloomberg)
