~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

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[Year 2001]

Vietnam hurt by attack, aims to maintain growth

HANOI - Vietnam has not been immune to economic fallout from the attacks on the United States, with impacts felt by both exporters and its state airline, but still expects solid growth this year, the finance minister said. Nguyen Sinh Hung told a business forum on Thursday night the government was focusing on ways to stimulate exports after the September 11 attacks and to boost domestic demand.

"Vietnam's economy is no exception to the situation for the world economy, but we are looking for all measures to obtain the highest level of growth given Vietnam's conditions," he said. "It could be more than seven percent." On Thursday, the government's General Statistics Office forecast gross domestic product growth for 2001 of 7.1 percent, provided 7.4 percent growth was achieved in the final quarter. Hung said Vietnam's efforts to attract more foreign investment should be helped by its stable political situation.

"There will be (more) preferential treatment from the government in terms of infrastructure and policy," he said. "It's sure that Vietnam's economy will obtain high growth, probably second only after China." "It is obvious that exports will be difficult," Hung said, but added that Vietnam would be helped by preferential tariff treatment from the Association of South East Asian Nations and once a trade pact with Washington was ratified.

Airline hit

He said the state airline, Vietnam Airlines, had suffered a decline in passenger numbers since September 11 and had had to adjust its business plan for the final months of the year. Hung gave no details, but said the Finance Ministry had stepped in to help after insurers increased premiums for aircraft and passengers. He said the foreign insurers would only compensate losses of up to $50 million and the ministry would guarantee third party claims above that amount.

Friday's official Lao Dong (Labour) newspaper quoted Vietnam Airlines as saying it had suffered a three percent decline in passenger numbers since September 11, or about 200 a week. One airline official told the paper the firm would have to reassess its aircraft leasing contracts if the decline reached five percent. On Thursday, Vietnam revised down its export growth forecast for 2001 to 10.7 percent from an initial target of 16 percent, citing the global economic slowdown and declines in prices of its key export commodities like rice and coffee.

It forecast an annual trade deficit of $300 million, compared with an $892 million deficit recorded in 2000. The General Statistics Office (GSO) forecast exports for 2001 would grow to $16 billion, while imports would rise 4.2 percent to $16.3 billion. The government had recently urged exporters to aim for exports of $16.5 billion this year, a rise of 14 percent over 2000, while at the start of the year, the National Assembly set a target of 16 percent growth.

Reuter - September 28, 2001.