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The Vietnam News

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Vietnam sees 2005 GDP growth 8.4 pct, below target

HANOI - Vietnam forecast on Tuesday the economy would grow 8.4 percent in 2005, below the government's initial target of 8.5 percent, and would slow to 8 percent growth in 2006. Prime Minister Phan Van Khai said Vietnam will further reduce poverty and boost foreign and domestic investment in 2006. The economy grew 7.7 percent in 2004.

"The key issue now to speed the growth pace is to raise investment efficiency," he said at the opening session of the National Assembly, highest legislative body, that is expected to pass 14 bills during a sitting slated to end on Nov. 30. Assembly delegates are expected to pass a law to simplify foreign investment procedures.

They will also debate in a televised session on Oct. 25 a mechanism to prevent and fight corruption, which foreign investors say remains a major hindrance to doing business in Vietnam. The anti-corruption law would be passed on Nov. 28. Other laws the assembly hopes to pass ranged from new company laws, to investment and tender procedures, regulations on real estate and amendments to the civil aviation law.

Nguyen Van An, the National Assembly's chairman, said the session would assess the country's performance this year and work out targets for development through 2010. The prime minister asked delegates to set a flexible inflation target rather than a fixed rate. Vietnam's inflation was expected to be around 8 percent in 2005, compared with the government's initial target of keeping it below 6.5 percent, the government report to the assembly said.

Vietnam's GDP in the first nine months of 2005 grew 8.1 percent from a year earlier, one of the fastest growth rates in Asia. The World Bank forecast Vietnam's GDP would grow 7.5 percent in both 2005 and 2006. The following table shows the government's key economic forecasts for 2005, compared with initial targets and those reached last year as well as the targets for 2006.

Reuters - October 18, 2005.