Hanoi - Vietnam reported strong economic growth of 8.5 per cent and record-high exports worth 48.3 billion dollars in 2007, the country's first year in the World Trade Organization, a government website reported Wednesday. Despite the strong growth, inflation hit a new high of 12.6 per cent this month and the trade deficit more than doubled as import flows increased with WTO membership, according to statistics posted on the government site.
The two trends reflect the benefits and challenges of communist-run Vietnam's market reforms and integration into the global economy. The country has been Asia's second-fastest-growing economy over the last decade, behind China.
Exports for 2007 were up 22 per cent, but imports jumped even higher, up 35.5 per cent to 60.8 billion dollars, leading to a 12.4-billion-dollar trade deficit.
Inflation in December hit a year-on-year high of 12.6 per cent, the highest rate in more than a decade, according to the General Statistics Office.
Prices of foods grew 21.1 per cent, houses and construction building 17.12 per cent and medicines and health services 7 per cent.
Both the high inflation and the record imports reflect the soaring foreign investment in Vietnam - foreign direct investment reached 20.3 billion dollars this year, nearly double last year's figure - as new money flows into the small economy and investors import equipment for factories and construction projects.
For 2008, the country is targeting 9 per cent GDP growth and exports of up to 58.6 billion dollars.
"The year 2008 has a meaningful significance in Vietnam's socio-economic development," said Prime Minister Nguyen Tan Dung Tuesday at a conference on economic development plan for 2008.
The government is determined to raise the average per capita income to 960 dollars in 2008, lifting Vietnam out of the group of developing countries with low income, Dung said.
He added that Vietnam intends to reduce poverty to 12 per cent of the population, down from 15 per cent in 2007.
In 1993, Vietnam's poverty rate was 58 per cent of the population, and the country has been lauded by the World Bank for its successful poverty reduction programs.
