Rice export prices increase US$10 per tonne

The Vietnam Food Association (VFA) will increase the floor prices of rice for export by US$10 per tonne as of December 22.  

Accordingly, the lowest price for the 5 percent broken rice is now US$500 per tonne while the 25 percent broken rice remains unchanged at US$470 per tonne.

The VFA has also announced that the floor prices for the10 percent and 15 percent broken rice are listed at US$495 and US$485 per tonne, respectively.

The adjustment will help stabilize rice prices in the domestic market, ensure the efficiency of exports and protect farmers’ benefits, said the VFA.

VND520 billion for Song Lo 3 hydroelectric power plant

A groundbreaking ceremony for the Song Lo 3 hydroelectric power plant was held in the northern province of Ha Giang on December 21.  

This will be the only hydro power plant in the province which uses the oscillating water column technology, the latest technology at present.

The VND520 billion plant, with three turbine generators and a total capacity of 18MW, will be built on the Lo River that runs across Vi Xuyen district.

It is scheduled to be finished in early 2015 and will contribute to developing tourism, transport and infrastructure in the province, and create jobs for local ethnic people.

Binh Thuan priotizes investment in wind energy

The central province of Binh Thuan leads the country in developing wind energy with 12 domestic and foreign businesses investing in 16 projects aiming to generate a total capacity of more than 2,000MW.  

Tran Van Nhut, head of the provincial Department of Industry and Trade, says the province has provided preferential policies to attract investment in the field and Binh Thuan aims to become the centre for ‘green energy’ in the country.

A 25 wind-turbine project implemented by the Vietnam Renewable Energy Joint Stock Company in Tuy Phong district has been completed and has already contributed nearly 50 million KWh to the national electricity network.

Another project on Phu Quy Island is expected to be put into operation before the Lunar New Year Festival.

Developing wind energy will protect the environment and help solve power shortages. It will also create jobs for many local people.

However, the province now faces the problem of training adequate  numbers of quality human resources and many wind power projects still have to employ foreign experts.

ADB hosts CPS conference in Dak Lak

A conference on the Country Partnership Strategy (CPS) for the central and Central Highland regions in 2012-2015 was held by the Asian Development Bank (ADB) representative office in Vietnam on December 21.  

Yumiko Tamura, ADB Principle Country Specialist, said the CPS will focus on economic development in Vietnam and its priority actions to ensure the highest efficiency in deploying human resources.

The ADB will help to improve public management capacity with a particular focus on reforming state owned enterprises, as well as the educational, financial and infrastructural sectors.

Leaders from central and Central Highland provinces proposed the ADB further support the regions’ socio-economic development and sustainable poverty reduction by constructing transport infrastructure, providing electricity and water for rural areas, treating waste for economic zones and protecting the environment for both rural and urban areas.

They asked the ADB to concentrate on improving the quality of management staff for some projects and investing to build new rural areas in remote regions.

The ADB committed to granting capital resources to help Vietnam achieve the set target of becoming an industrialized country by 2020 and address the challenges facing a middle income country, towards stable and sustainable development.

Aquatic exports expected to reach US$6.5 billion in 2012

Export revenue of aquatic products is expected to hit US$6.3-6.5 billion by 2012, an increase of 5 percent against 2011.  

This target was set by the Directorate of Fisheries (D-Fish) at its meeting in Hanoi on December 21 to set the 2012 plan .

To achieve the goal, D-Fish will strictly control the implementation of Vietnam’s Good Agricultural Practices (VietGAP) to meet requirements for food safety and hygiene, product origins, environmental protection and bio-diversity.

Beside its traditional markets like the US, Japan and the EU, aquatic exporters will penetrate other high potential countries including the Republic of Korea and China.

They are encouraged to work closely with farmers to develop and expand farming areas to have adequate input materials for processing and exporting.

D-Fish will have long-term plans for trade promotion and cooperation activities with ASEAN and African countries.

Hanoi’s CPI up 0.61 percent in December

The capital city’s consumer price index (CPI) in December has increased by 0.61 percent over November, and 17.07 percent over the same period last year.  

Prices of garment and textiles, footwear, and cultural, entertainment and tourism services went up by more than 1 percent, while price index of most products and post and telecommunications remained at less than 1 percent.

The high CPI was attributed  to the recent floods in the central region, which have driven up rice prices. In addition, other products such as drinks, tobacco, garment and textiles, footwear and home equipment and appliances also increased in price with rising demand ahead of the Christmas, New Year and Traditional New Year festivals.

Meanwhile, Ho Chi Minh City’s CPI in December was slightly higher than in Hanoi, standing at 0.73 percent over the previous month and 15.86 percent against last year.

The highest increase was recorded in restaurant, beverages and food services (up 1.29 percent), followed by home equipment and appliances (up 0.88 percent), housing, electricity, water, fuel and building materials, goods and services (up 0.56 percent) and cultural, entertainment and tourism services (up 0.35 percent).

Other groups of products which saw price hikes of less than 0.2 percent included garment and textiles, footwear, transport, medicines and healthcare services, and education.

On contrary, prices of post and telecommunications services dropped by 0.21 percent.

Gov’t approves strategy on housing for the poor

The Prime Minister has approved a national housing development strategy up to 2020 with a vision to 2030, with a specific aim to construct 10 million square meters of housing for low-income earners in the next four years.

Apartment buildings should be the most popular type of housing projects, accounting for over 80% of the total new housing units to be developed in Hanoi and HCMC, while the percentage would be 50% in first and second-grade cities and 30% in third-grade cities.

The housing strategy also sets a goal to build 12.5 million square meters of social housing in the 2016-2020 period, raising the minimum housing area to 25 square meters per capita nationwide, and 29 square meters in urban areas. It is expected that the national figure would surge to 30 square meters per capita by 2030.

To achieve such a goal, the Government has established the Central Steering Committee for Housing Policy and Real Estate Market involving six ministries including the Ministry of Construction, the Ministry of Planning and Investment, the Ministry of Finance, and the Ministry of Labor, War Invalids and Social Affairs.

In addition, the investment procedures would be simplified to encourage investors to join apartment projects under the form of build-transfer (BT) and public-private partnerships (PPP).

Along with the land fund and tax policy, the national housing development strategy would pool capital from the State budget, government bonds, official development assistance (ODA) and other sources to achieve its target.
 
Sacombank, Credit Suisse cut deal

Saigon Thuong Tin Commercial Bank (Sacombank) and Credit Suisse Singapore Limited on Tuesday signed a memorandum of understanding to promote cooperation in banking services.

Both parties agreed to establish a sustainable relationship to facilitate mutual support and enhance the efficiency of both institutions in Vietnam. Credit Suisse is committed to cooperating with Sacombank in various areas.

This agreement will open opportunities for the development of the relationship between the two sides in the future. The local institution will be able to develop and optimize its banking products and services.

Sacombank as of this month reported VND15.2 trillion in equity and VND10.7 trillion in chartered capital. It has 405 transaction offices in Vietnam, Laos and Cambodia.
 
Sunwah looks to low-cost housing segment

Sunwah Group, the developer of an office building and a high-end apartment high-rise in downtown HCMC, looks set to get involved in low-cost housing development projects in the city.

Sunwah president Jonathan Choi told the Daily that his group, which is based in Hong Kong, China, would set aside about US$100 million to develop an apartment project near Tan Son Nhat International Airport. However, he declined to reveal the scale of the project, on which work is projected to start in the next two years.

Located in a densely populated area, the scheme is expected to meet the local housing demand.

After 40 years of investing in the areas of agro-product processing and export in Vietnam, Sunwah began its involvement in the property market with the  grade-A Sunwah Tower in HCMC built in 1993.
 
Budget deficit seen up next year

Vietnam’s budget deficit is estimated to increase to VND140.2 trillion next year from this year’s VND111.5 trillion, according to the Ministry of Finance.

However, in terms of percentage of GDP, the budget deficit would account for 4.8% of GDP next year, slightly lower than the 4.9% this year.

The ministry expects next year’s total budget revenue to amount to VND740.5 trillion, up by around VND66 trillion from this year, and expenditures to VND852.76 trillion, up by VND120 trillion.

Besides, the principal of payable loans next year would be around VND50.34 trillion, down from this year’s VND63.44 trillion.

In the list of budget spending items for next year, the highest would go to investment and development with VND180 trillion. Other major amounts would be education and training with VND135.92 trillion, pension and social security VND85.56 trillion, wage reform VND59.3 trillion and health VND51.1 trillion.
 
IFC offers US$30 million for import-export trade development  

International Finance Corporation (IFC), a member of World Bank, announced a US$30 million loan to Vietnam International Bank (VIB), for import-export trade development and for creating more jobs.  
 
According to Duong Thi Mai Hoa, general director of VIB, the fund is part of IFC’s Global Trade Finance Program. The fund is expected to help VIB improve its capacity to cover risks in granting finance to local companies, mostly to small and medium enterprises.

Earlier in July this year, IFC announced a loan of $505 million for the fiscal year, for Vietnamese banks to help local companies increase foreign trade and create jobs through its Global Trade Finance Program.

IFC's Global Trade Finance Program has helped extend the capacity of banks considerably over the past few years when trade lines have been limited for local importers and exporters.

Price subsidized goods reach suburban city residents  

Ho Chi Minh City Department of Industry and Trade have implemented the price subsidized program in outlying districts of Ho Chi Minh City, to meet rising demands of suburban local residents.  

At present, the city has 878 shops selling subsidized goods in 151 markets which are being highly appreciated by consumers for quality and price.

According to the department, the volume of goods in the price subsidized program is accounting for 30-40 percent of the market demand, an increase of 20 percent from last year. So far, businesses have stockpiled goods 3-4 times more than planned at a total value of around VND5.65 trillion (US$265 million).

Leaders of several communes in suburban districts said that earlier residents did not pay attention to the price subsidized program. However they have now changed their mind.

Nguyen Thi Hoang Anh, chairwoman of the People’s Committee in Nhon Duc Commune of Nha Be District said that people in her commune were eager to buy subsidized goods for the coming Tet festival. The commune is about to open two centres for sale of subsidized goods, to meet a surging demand.

Le Thi Mai, a grocery store owner in Hiep Phuoc Industrial Zone in Nha Be District said several residents and workers have now switched to buying at Co-op Food stores, rather than at her shop.
 
Worker Nguyen Van Ly from Le Minh Xuan Industrial Zone in Binh Chanh District said that markets selling Vietnamese made goods offer a diverse variety of products.

Low quality imported goods like tainted chicken legs, toxic melon seeds and spices are continually being uncovered by authorities. This has led consumers to buy subsidized commodities, as most are genuine, hygienic and domestically produced.
 
Mai Xuan Tan, deputy chairman of Xuan Thoi Thuong Commune in Hoc Mon District said local people prefer subsidized goods for their good quality and preferential prices.

Chinese bank offers $200 million loan

The State-run China Development Bank (CDB) will lend the Bank for Investment and Development of Viet Nam (BIDV) US$200 million to develop electricity, telecommunications, agriculture, transport, light industry and building material projects under a credit contract signed this morning.

The money will be paid back to the Chinese bank over five years.

A letter of commitment to this effect was signed in Ha Noi on Wednesday by the two banks' representatives in the presence of Vietnamese Vice President Nguyen Thi Doan and her visiting Chinese counterpart Xi Jinping.

This is the second preferential credit package which CDB has granted to BIDV following its $100 million loan last year.

In the context of limited credit, especially middle and long term loans, the loan has proved CDB's trust in BIDV in terms of its financial capacity and prestige. The loan is expected to supplement a considerable amount of funds for the Vietnamese bank to improve its capital structure.

BIDV is striving to become a multimodal financial-banking group that provides services meeting international standards.

By the end of last month, its total assets reached VND403 trillion, with mobilised capital at VND274 trillion, credit at VND268.2 trillion and pre-tax profit at VND4.1 trillion.

North reviews foreign investment
 
Obstacles to attracting foreign direct investment in northern cities and provinces came under the spotlight at a conference here yesterday.

Addressing the gathering, the director of the Ministry of Planning and Investment's Foreign Investment Agency, Do Nhat Hoang, also called for closer co-operation among ministries, agencies and local governments in administering foreign-invested projects.

Hoang also suggested local authorities budget sufficient resources to promoting investment.

"A specific and feasible list of projects calling for investment will enable us to attract more foreign investors," he added, noting that the ministry was currently drawing up a list of projects calling for foreign investment until 2015.

Representatives from Hai Phong Department of Planning and Investment told the conference that the northern port city had seen an encouraging result in attracting foreign investment this year and that 27 existing projects had registered to increase their levels of investment.

The ratio of FDI disbursement had reached 49 per cent in the city this year, demonstrating the faith of many foreign investors in the city's investment climate, they said, noting that Asian countries such as Japan, South Korea and Thailand remained the city's leading sources of foreign direct investment.

However, they said, difficulties in revoking licences for stagnant projects remained problematic. While current regulations allowed projects to be halted if they fell behind schedule without proper reasons, city officials acknowledged that the prolonged global economic downturn could be considered a proper reason for delaying a major real estate project. They requested specific guidance from the ministry on the issue.

Ha Noi Department of Planning and Investment deputy director Nguyen Van Tu spoke highly of the contribution of foreign investors to the capital city's socio-economic development.

The capital was home to 2,212 foreign-invested projects worth a combined US$23.3 billion, of which $7 billion had been disbursed, Tu said.

The foreign-invested sector also made up 50 per cent of the city's industrial output, he said.

However, he added, Ha Noi continued to face difficulties in supervising the implementation of licensed projects due to lack of personnel resources.

Hai Duong Department of Planning and Investment deputy director Nguyen Xuan Doan said it was necessary for localities to supervise licensed projects and suggested localities send a team to inspect projects at least once a year to increase their management efficiency.

Better selecting suitable projects which would contribute to sustainable development was also important, he said, noting that Hai Duong had rejected several projects that would have generated a high level of pollution or used too many migrant workers.

Export firms urged to buy credit insurance
 
The Government's goal of ensuring that at least 3 per cent of firms' export revenue, estimated to be worth US$3 billion, is guaranteed against non-payment is failing to meet its target, a forum in Ha Noi heard yesterday.

At the meeting, which reviewed the programme's implementation last year, organised by the ministries of Finance and Industry and Trade in Ha Noi, participants heard that Vietnamese exporters were unfamiliar with the norm of credit insurance.

Attendees heard that Vietnamese firms were instead using letters of credit or money-transfer to ensure payment.

Furthermore, firms complained that they could not afford to undertake the cost of taking out insurance against losses.

The finance ministry said insurance companies were not interested in offering this kind of service. It said just seven out of 29 insurance companies were willing to offer credit insurance.

The ministry added that foreign-invested insurance companies had signed credit-protection contracts with just 14 firms, worth only $77.55 million, accounting for nearly 0.1 per cent of the total country's export turnover.

During the meeting, finance ministry officials said they would offer training courses on credit insurance for exporters.

Deputy Minister of Industry and Trade Nguyen Thanh Bien said his ministry would encourage large corporations to take out credit-insurance schemes.

Under decision 2011/QD – TTg, issued by the Government in November 2011, 23 commodity groups would receive export guarantees up to 2013, such as seafood, rice, coffee, fruit and vegetables, textiles, garments and footwear.

Seven insurance companies have been selected to run the programme – Bao Viet, Petro Viet Nam Insurance (PVI), Bao Minh Joint Stock Corporation, Bao Viet Tokio Marine, QBE Viet Nam, Chartis Viet Nam and United Insurance Co of Viet Nam.

A recent survey conducted by the Ministry of Industry and Trade involving 200 exporters revealed that all of them wanted to be involved in the export credit-insurance programme.

Commodities exchange on the way

Derivative exchange, considered a new investment channel for local business in the gloomy economy, will take a leap in the domestic commodity market next year.

Nguyen Duy Phuong, director of the Viet Nam Commodities Exchange (VNX), made the above statement at a conference held in the capital on Tuesday.

At the event, entitled "Viet Nam's Economy 2011 and Prospects for 2012 - Opportunities for Commodities Exchange", Phuong estimated that the number of VNX accounts would surge from the current 1,385, worth VND7 trillion (US$333.3 million), to roughly 5,500 accounts worth VND18.6 trillion ($885.7 million) next year.

He said that derivative transactions would help customers ensure high product quality and cut transportation and travel costs.

In addition, it would help domestic producers and manufacturers strengthen their positions in negotiating with foreign partners.

Launched earlier this year, the domestic commodity exchange has remained unpopular locally. Currently, 41.3 per cent of transactions via the VNX include rubber trading while 58.6 per cent focus on coffee.

Domestic businesses at present only use the derivative exchange as a brokerage with foreign customers while it should in fact also serve as a chain providing commodities and logistics.

Phuong expected the market to improve significantly next year when the VNX joins hands with banks, goods evaluation and logistics companies and completed a warehouse system to meet investor exchange and storage demands.

The VNX has also signed a co-operation agreement with the Viet Nam Chamber of Commerce and Industry's Enterprise Development Institute to implement programmes focused on attracting additional investors.

Investors should consider choosing the commodity market as an investment channel instead of real estate or the stock market, a finance professor said yesterday at an international conference held in HCM City.

Steve Ohana, who teaches at ESCP Europe Business School, said for the short to medium-term, the current environment was not favourable for investing in commodities.

Organised by the French-Vietnamese Centre for Management Education (CFVG), the conference attracted the interest of managers and senior officers from the banking and financial industry in HCM City.

Ohana said that industrial metals and soft commodities (grains in particular) offered dull investment prospects due to the combination of a bad-growth outlook in Europe and China, and the rally of the US dollar against most other currencies.

However, it could improve next year.

"As for gold, I would not advise investing in the short term in the current deflationary context," he said. "However, in the long-term, this is a good asset to hold against the threat of currency debasement that is looming in most industrialised countries."

Commodity markets are not an attractive investment channel because regulations to make it more transparent still do not exist. Thus, investors don't trust the market.

Ohana advised investors to be wary of large rises in the commodity market caused by minor trends or liquidity conditions on the market.

As commodities have become sensitive to liquidity conditions, signs of liquidity degradation should be actively monitored as an indicator of downside risk.

At the conference, a representative of the Viet Nam Commodity Exchange, the first commodity exchange to be licensed in the country by the Ministry of Industry and Trade, mentioned several factors that affect commodity prices in Viet Nam.

The price of commodities this year has been influenced by the turbulent financial market, natural disasters, political tensions and local government policies around the world.

These include the sovereign debt crisis in the Eurozone, the US economy (budget deficit and unemployment), political unrest in the Middle East, and natural disasters in Japan and Thailand.

World markets are in turmoil amid renewed concerns that the fragile US economy and a debt-ridden Eurozone could plunge into a new recession.

In 2012, the outlook for the global economy could be negative, and commodity prices could be affected, he said.

Conference targets Japanese investment

Viet Nam wants to attract more quality investment projects from Japan, particularly in the support industry, according to a ministry official.

Aichi Prefecture, one of the largest economic and industrial centres in central Japan, could contribute greatly to the support industry in Viet Nam, Do Nhat Hoang, director of the Ministry of Planning and Investment's Foreign Investment Agency, said at a meeting with Aichi Province officials in HCM City on Tuesday.

"It would be great if Viet Nam can take full advantage of the cooperation opportunities," he said, adding that the ministry's Foreign Investment Agency plans to create favourable conditions in Viet Nam for Aichi investors.

Saburo Onoki, director of the Aichi prefecture's Trade and Investment Agency, said the chairman of the province as well as a business delegation would visit Viet Nam in April.

Nguyen Tan Phuoc, deputy head of HCM City Export Processing and Industrial Park Authority (HEPZA), said HEPZA welcomed more investment from Japanese investors, particular Aichi businesses.

By the end of this year, HEPZA had received Japanese investment worth nearly US$1 billion.

Phuoc said that Viet Nam would consider establishing an industrial zone solely for use by Japanese small – and medium-sized enterprises.

Tran Nhu Hung, deputy director of the Sai Gon Viet Nam Rubber Group (VRG) Investment Holding Corporation, offered preferential policies to the Japanese business community.

The corporation, a member under the Viet Nam Rubber Group, was established to manage and develop infrastructure projects for large-scale industrial parks and urban areas, such as Dong Nam and Phuoc Dong industrial parks.

The corporation will offer a preferential land rental price of $60 per sq.m for Dong Nam Industrial Park, and $30 per sq.m for Phuoc Dong Industrial Park, compared to the normal price of $65-$70 and $35-$40, respectively.

Free infrastructure maintenance will also be offered for the first year, as well as free support to foreign investors for business registrations, investment licenses and labour recruitment.

During the meeting, Doan Duy Khuong, deputy director of the Viet Nam Chamber of Commerce and Industry, pointed out that the weak support industries of Viet Nam had created obstacles for a new wave of investment, including from Japan.

He said that macroeconomic forecasts for Viet Nam were still not effective, creating challenges for Japanese companies to develop investment strategies.

Challenges await footwear exports in 2012

Vietnamese footwear exports are expected to encounter several challenges in the coming year, namely from the economic volatility of exporting markets, declining export orders, and tough competition from other countries, the Vietnam Leather and Footwear Association (Lefaso) has warned.

Vietnamese footwear exports will see slowing growth in certain markets, especially in the EU, the association said.

Many footwear businesses said the number of orders they had contracted for exports in the first months of next year dropped by up to 20 percent when compared to the same period of this year.

“We have signed contracts on exports during the first two quarters of 2012, but export volumes have fallen by 20 percent year on year,” said H.T., director of the Ho Chi Minh City-based KH footwear manufacturer.

He attributed the declines to the fact that many of the country’s major export markets, mostly in Europe, have cut spending amid the troubled global economy.

Moreover, local footwear exports also face lawsuit disputes from Brazilian, Mexican, and Argentine rivals.

In October, for instance, Brazil officially ran a scanner on Vietnamese footwear exports to detect whether they were manufactured in China and sent through Vietnam, in order to be labeled as made in the latter country and therefore bypass anti-dumping tariffs.

Industry insiders said other countries also keep a close eye on Vietnamese footwear exports, waiting for a chance to take them to court.

Besides such external challenges, many exporters also admitted that they have yet to solve the problem of low-value contracts earned from exports.

This is thanks to the fact that many local businesses are still manufacturing on a small scale and acting as outsourcers; while relying too heavily on imported raw materials.

“The localization ratio in footwear manufacturing is still lower than expected, despite the slight increase compared to previous years,” Lefaso’s deputy chairman, Diep Thanh Kiet, explained.

The localization ratio indicates the percentage of materials used by footwear companies that are produced locally.

Kiet said that local footwear exporters should not worry about the decline in export orders. Instead, they should focus on attracting export contracts with high values, he said.

“High-value export contracts will bring higher value added to exporters, while helping them avoid the risks of being sued for anti-dumping in their major export markets,” he said.

Many businesses also anticipated an opportunity to return to the EU market at the end of March 2012, when the EU is set to remove its supervision over the country’s footwear exports.

This is one reason that, despite the potential difficulties, a Lefaso forecast predicts that Vietnamese footwear exports will top US$7 billion in 2012, up by 12 percent compared to this year.

Exports to the EU are likely to remain unchanged, or rise slightly, while other markets, such as Taiwan, Australia, and Mexico, will see growth of 12 to 15 percent, Lefaso said, adding that exports to the U.S. will grow at the fastest pace.

HCMC fines, suspends dealers of substandard gas

The Ho Chi Minh City People’s Committee has decided to fine 11 fuel dealers who were caught selling substandard gasoline VND30 million (US$1,440) each, and cancel their licenses for a year.

This is the toughest possible penalties for these dishonest dealers, said Le Manh Ha, deputy chairman of the committee.

Earlier, these dealers, most of whom are located in Tan Phu and Binh Chanh districts, were caught mixing A83-grade gasoline with A92 and A95 to produce substandard products to deceive customers.

The municipal Department of Science and Technology said it would continue to inspect more than 500 filling stations citywide as well as fuel wholesalers to discover similar frauds.

Dealers who sell substandard gas can also be subject to criminal charges, the department said.

Deposit rate to drop to 10 pct by end of 2012

The deposit interest rate is expected to drop to around 10 percent by the end of 2012, in accordance with the cooling inflation statistics, State Bank of Vietnam Governor Nguyen Van Binh said in a press briefing yesterday.

At the press meeting to discuss the 2012 monetary policies, Binh said that the central bank will continue its tightened credit policies, with a reduction in interest rates remaining the central bank’s top concern in implementing its measures next year.

“Though inflation has been on a downwards trend, it is still likely to soar again,” he said.

“It is a tough question of when to cut interest rates, and by how much they will be dropped, for the central bank to solve.”

Binh said the central bank will take the target of 10-percent inflation in 2012 as the basis to cut interest rates accordingly.

“For instance, if inflation can be restricted to below 10 percent, the deposit rate at the end of next year will fall to around 10 percent from the current 14 percent a year.”

Binh added that credit growth this year was around 12 percent, and is expected to reach 15-17 percent next year.

“The country’s economic growth will be around 6.5 percent, and this will enable inflation to fall to a single-digit rate.”

Regarding the highest priority borrowers for bank loans next year, Binh said the agricultural production sector remains the top priority, followed by exports, supporting industries, and the small- and medium-sized enterprises.

Binh added that certain categories of loans in the real-estate sector will no longer be subject to the tightened credit policy slapped on the property sector.

They include loans to housing projects that are scheduled to be completed in 2012, the development of low-income and workers’ housing, or dormitory developments for students.

“This will help reduce the unsold inventory of the real-estate sector,” Binh said.

He added that the central bank will issue two more decrees by year’s end regarding the production and trading of gold bullion, and the gold mobilization needed to fortify the stabilization of the gold market.

Aviation sector aims for 36 mln passengers

The aviation sector of Vietnam is forecast to carry about 36 million passengers by 2015.

The Korea Development Institute (KDI) on Thursday announced its final report under a project on development experience from the Republic of Korea .

The KDI also forecast that the volume of goods transport by air will increase from 460,000 tonnes in 2010 to 850,000-930,000 tonnes in 2015.

To meet the demands for passenger and good transport by 2015, KDI said, the Government needs to pour investment into the three major cities of Hanoi , Ho Chi Minh City and Da Nang to link local and international air routes and to boost regional and national economic development as well as ensure national security.

However, due to budget limitations, the Government should build mechanisms for large airports like Noi Bai and Tan Son Nhat to attract private and foreign investment as the Republic of Korea has done.

Vietnam should also learn from the experience of Incheon airport in the Republic of Korea in having competitive charges for airports.

According to the KDI, the existing infrastructure at 13 airports in Vietnam is not capable of meeting the demands of passenger and goods transport.