Wednesday, 6 May 2009

Vietnam to issue $1.1 bln in government bonds

HANOI, May 6 (Reuters) - The Vietnamese government said it planned to issue an additional 20 trillion dong ($1.12 billion) in dong bonds this year to raise funds for infrastructure projects.

The issue would increase the total fund allocated for infrastructure projects to 64 trillion dong this year as the government aimed to spend more to bolster economic growth, Prime Minister Nguyen Tan Dung said in a cabinet report seen on Wednesday.

'Despite the impact from the global financial crisis and recession in major economies including the United States, Europe and Japan, there have been clear and positive progresses in most of the sectors in the economy,' the report said.

'The macro economy has been put under control,' it added.

Earlier this week the Ministry of Planning and Investment said Vietnam should see higher economic growth the second quarter at up to 3.8 percent.

Vietnam's economic growth slowed to its lowest level in more than a decade in the first quarter as exports and foreign investment succumbed to the global slowdown, hitting an estimated 3.1 percent from a year earlier.

This was much lower than the 7.4 percent expansion seen in the same period last year.

Last month, Prime Minister Nguyen Tan Dung said the economy would pick up in last three quarters of the year as the government's $8 billion stimulus package kicks in.

Vietnam's economy would grow between 5 percent and 5.5 percent this year.

Economists including those from the World Bank have said the government's stimulus package, which includes interest rate subsidies on loans and tax incentives for small and medium-sized companies, had a positive impact on the economy.

($1=17,775 dong)

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