VN's GDP expected to reach 6.3 pct in 2011

Vietnam's real GDP growth forecast has been revised upwards from 5.5 percent to 6.3 percent for 2011 thanks to a good result of the fourth quarter in 2010, the Research and Markets magazine said in its Vietnam quarterly report.

However, the report warned that mounting inflationary pressures, a persistent trade deficit and fiscal imbalances remain outstanding risks that could undermine macroeconomic stability over the coming months.

The report said that Vietnam's real GDP growth came in at a better-than-expected 6.8 percent in 2010, led by a strong performance in the construction sector.

Vietnam's fiscal deficit narrowed from 6.6 percent of GDP in 2009 to 4.7 percent of GDP in 2010, largely in line with its previous forecast of 4.6 percent.

Despite an improvement in the country's fiscal position, the report warned that social expenditures as a percentage of total fiscal expenditure have continued to rise since 2007. Withdrawing these subsidies will prove a challenging task.

Moreover, rising food and fuel prices remain a significant threat that could translate into heavier government subsidies in 2011, the report said.

tuoitrenews, vna

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