Vietnam foreign reserves to grow by $5 billion
Posted: October 15, 2011 by THE CURRENCY NEWSHOUND - Just Hopin in Asian Currency Markets

Vietnam’s economy will grow by 5.9 percent this year and foreign reserves will increase by US$5 billion, Prime Minister Nguyen Tan Dung has said during a meeting on the country’s macro-economy in 2011.

Addressing the business community at the meeting, the Prime Minister admitted that the country’s economy is in difficulty but it has managed to gain considerable results.

He said economic growth in the first three quarters of this year was in an upward trend, and the full-year growth was expected to be 5.9 percent compared with the 6-percent target, which he said was “acceptable” amid economic difficulties.

As for the battle against inflation this year, Dung said the Consumer Price Index was under the government’s control and tended to gradually fall down.

Another good sign of the economic development, he said, was that the export turnover in the year to September rose by 34 percent over the same period last year, reducing the trade gap to below 10 percent from the 20 percent posted last year.

He affirmed that the exchange rate was under the flexible management of the State Bank of Vietnam.

“Another good point is that the balance of payment will post a surplus this year after two consecutive deficits,” the Prime Minister said.

“This will enable Vietnam to increase foreign reserves by $4-5 billion.”

According to the International Monetary Fund, Vietnam’s foreign reserves in the first half were recorded at around $13.5 billion.

Prime Minister Dung said Vietnam’s overspending this year was estimated at 4.9 percent, down by 0.4 percent compared with estimates.

He said overspending had dropped thanks to the increased budget collection.

As for the complaints that the budget collection of 25 percent of GDP was too high, causing difficulty to businesses, he affirmed that the rate was reasonable.

“The budget collection includes incomes from the land use right auction and crude oil exports.

“If these incomes are excluded, the tax collection only accounts for 15 percent of GDP, which is equal to the rate in the neighboring countries and does not hinder businesses,” he explained.

The Prime Minister also admitted that challenges and risks were still lurking ahead for the country’s economy.

He said despite the government and businesses’ efforts, only 1.55 million new jobs were created this year, failing to meet the target of 1.6 million.

“This is a weakness that we should improve as soon as possible,” he said.