IMF sees higher 2013 lending, growth pace for Vietnam

HANOI Sun Aug 11, 2013 11:36pm EDT

Men work on the assembly line at a Piaggio scooter and motorcycle factory in Vietnam's northern Vinh Phuc province, outside Hanoi July 11, 2013. REUTERS/Kham

Men work on the assembly line at a Piaggio scooter and motorcycle factory in Vietnam's northern Vinh Phuc province, outside Hanoi July 11, 2013.

Credit: Reuters/Kham

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HANOI (Reuters) - Lending has picked up "modestly" in Vietnam this year and the country should grow slightly faster than projected earlier, the International Monetary Fund said.

The IMF, in a statement issued on August 9 after a delegation visited Vietnam, said it expects no interest rate cuts in the short term.

The Fund projected 2013 economic growth at 5.3 percent, compared with April's estimate of 5.2 percent. The IMF has put the 2012 pace at 5.2 percent, while the government said it was 5.03 percent.

For this year, annual credit growth should be 12.4 percent compared with 8.7 percent in 2012, the IMF said. Its estimate is slightly above the central bank's target of 12 percent.

"Credit growth has picked up modestly in real terms, mostly concentrated in the export-oriented and agricultural sectors," the IMF said.

The central bank has lowered the lending rate ceiling three times this year to support businesses, while streamlining loans to help control inflation.

"Directors encouraged the State Bank of Vietnam (SBV) to remain focused on achieving low and stable inflation, supporting the exchange rate anchor, and replenishing international reserves," the IMF statement said. "In the near term, they saw little scope for further interest rate cuts, which could put the SBV's inflation-fighting credibility at risk."

Some economists think Vietnam this year could have its slowest annual growth in 14 years.

For the first two quarters of 2013, the government reported annual economic growth of 4.9 and 5 percent respectively.

(Compiled by Ho Binh Minh; Editing by Richard Borsuk)

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