The Vietnamese government deserves praise for taking decisive action to mitigate the negative impacts of the global economic cisis, but the success has been achieved at a price, a new European Union report says.

“Pursuing a pro-growth agenda into late 2010 despite signs of overheating has had a significant negative impact on inflation, forex reserves, the exchange rate, and above all, investor confidence,” according to the Green Book 2011, a publication by the EU Commercial Counsellors and the EU Delegation to Vietnam.

The report said Vietnam’s economic growth has arrived at a “critical stage” where the government should decide clearly to implement pro-business policies in order to boost investor confidence.

Vietnam’s inflation is expected to rise 19.78 percent this month compared with May last year, the General Statistics Office said. The government launched a series of measures late February in an attempt to restore macroeconomic stability and control inflation, and economists say the policies have begun to show their effect.

The Green Book is an annual report on Vietnam’s economic performance in general and EU-Vietnam trade relations in particular.

This year’s report said Vietnam enjoyed a trade surplus of nearly 4.9 billion euros with the EU in 2010. Labor intensive products continued to dominate Vietnamese exports to the EU while the key commodities exported from the EU to Vietnam remained high-tech products.

The top export product from Vietnam to the EU last year was footwear, valued at 1.75 billion euros. It was followed by textiles and garments, coffee, seacooking and furniture.