Vo Tri Thanh, an expert at the Central Economic Management and Research Institute, said Vietnam’s GDP will increase by 6.5-6.6 percent in 2008

The global financial crisis means Vietnam will not meet the government’s economic growth target of 7 percent this year, a local expert said Thursday.

“According to our latest forecast based on the updated macroeconomic report to September, Vietnam’s economic growth may stand at 6.5-6.6 percent and inflation rate at some 25 percent in 2008,” Thanh told reporters on the sidelines of the 2008 Economic Forum in Hanoi Thursday.

Thanh predicted that Vietnam may post economic growth of 6-6.5 percent, and inflation rate of 12-13 percent in 2009.

“So we should put top priority on curbing inflation and ensuring macroeconomic stability,” he said. “Besides, we should take other measures to deal with social welfare-related issues, and support firms with development potential but now facing temporary difficulties, especially small-and medium-sized ones.”

The government will be able to gradually loosen monetary policy after inflation is stabilized, he said. “We should be very careful in dealing with pressures of ensuring economic growth and macroeconomic stability.”

Thanh said the world economy was expected to experience low liquidity in money markets and slowing growth, making it harder for national governments to reduce high rates of inflation.

But some countries could also benefit from the global slowdown. “The recession is expected to reduce demand for commodities in the world market,” he said.

Vietnam, in the short term should keep its tightened monetary and financial policies, Thanh said.

The State Bank of Vietnam has set the official interest rate at 14 percent, which allows commercial banks to offer deposit and loan interest rates of up to 21 percent.

Vietnam posted GDP growth of 6.52 percent in the first nine months of this year, according to the Government’s Office.

Meanwhile, the 2008 Economic Forum Thursday heard Vietnam’s exports would be affected by the global financial crisis.

“Vietnam has exported mainly to the US, the EU and Japan,” he said. “If those markets go down, Vietnam’s export turnovers will be affected.”

The forum was also told Vietnam’s banking sector was in good condition in spite of the global financial crisis.

General Director of the central bank’s banking development strategy department, Le Xuan Nghia, said bank loan statistics for 2008 would be available by the end of the year. Authorities would be able to use this data to “avoid critical situations.”

Reported by Ngan Anh