Wednesday December 3, 08:18 AM
UPDATE 1-Vietnam pledges $1 bln to spur investment, consumption
HANOI, Dec 3 (Reuters) - The Vietnamese government announced plans on Wednesday to spend about $1 billion to spur investment and consumption and said it wanted to lower taxes to help businesses as it sought to fend off an economic slowdown.
The plan, outlined in a report about a cabinet meeting, came one day after the government announced what will be the central bank's fourth benchmark interest rate cut in six weeks, to take effect on Friday.
'The focus is now on immediate measures to prevent an economic slowdown and a stagnant production and business environment,' the government report quoted Minister of the Government Office Nguyen Xuan Phuc as saying.
Vietnam battled runaway inflation and a widening trade deficit for much of the year by tightening monetary policy, but officials have become increasingly concerned the global credit crisis could drag down growth and have reversed their course.
'The government will set aside about $1 billion to boost investment and consumption,' a government report said without giving details of how or when the money would be spent, nor where it would come from.
Hanoi also lowered its annual inflation forecast for this year to below 21 percent from its previous estimate of 24 percent, the report said.
The revision, the second in as many weeks, is a result of lower world oil prices and aggressive measures to contain consumer price rises, it said.
Lower world oil prices have helped Vietnamese oil product distributors cut fuel prices seven times since early October.
The central bank's credit-tightening policy also curbed lending to businesses for much of 2008.
(Reporting by Nguyen Nhat Lam and John Ruwitch; Editing by Tomasz Janowski) Keywords: VIETNAM ECONOMY/STIMULUS
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