Vietnam's economy to grow 5.8 pct in 2010: UN agency forecasts

The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) said in Hanoi Wednesday that Vietnam's economy is forecast to grow 5.8 percent this year, still lower than the pre-crisis levels.

UNESCAP made the forecast in its report titled "Economic and Social Survey of Asia and the Pacific".

In the face of the worst global economic downturn in the region, Vietnam's economy showed relative resilience compared to other economies in the Southeast Asian region, Pham Lan Huong, Acting Director of Department for Macroeconomic Policy and Integration Studies under the Vietnam's Central Institute for Economic Management, told a press conference Wednesday in Hanoi.

However, the growth of Gross Domestic Products (GDP) during the first quarter of 2010 reduced to 5.8 percent from 6.9 percent in the first quarter of 2009.

According to UNESCAP, one of the grave challenges facing Vietnamese economy is the increasing inflationary pressures.

Vietnam's inflation this year is forecast to rise to 10.3 percent, the second highest level among Southeast Asian countries, next to Myanmar which is forecast to be as high as 10.4 percent, said Huong.

Last year, Vietnam's inflation stood at 6.88 percent.

UNESCAP also reported that due to increased government spending and reduced tax revenue, Vietnam's deficit soared from 4.5 percent of GDP in 2008 to 8.2 percent last year, one of the highest percentage of its kind in the region.