Vietnam cuts 2008 GDP growth target to 7.5 pct

HANOI, March 28 (Reuters) - Vietnam has cut its 2008 economic growth target to 7.5 percent from its initial goal of 8.5 percent to 9 percent amid the global slowdown and double-digit inflation, a senior government official was quoted as saying.

The official Vietnam News Agency late on Thursday quoted Deputy Prime Minister Nguyen Sinh Hung as saying the "priority was to control inflation, stabilise the macro economy and maintain high economic growth, striving for 7.5 percent in 2008".

The Communist-run Southeast Asian country is a favourite emerging market for foreign direct investment, but twin macro economic headaches of high prices and a tripling of the trade deficit persisted in March [ID:nSP74248].

Government statistics released on Thursday showed first quarter annual economic growth slowed slightly to 7.43 percent from 7.73 percent a year ago. Vietnam has one of the fastest-expanding economies in the world after China, with growth averaging 7.5 percent a year since 2000.

The Vietnam news agency report quoted Hung, a former finance minister, as saying "the country is in a difficult stage while the world economy slows, strongly affecting Vietnam and time is needed to overcome these difficulties, probably years."

Central bank efforts to tame inflation in the first quarter have contributed to a liquidity crunch that rippled through the economy, sending the fledgling stock markets into a freefall and hurting small commercial banks in the underdeveloped banking system. (Reporting by Ho Binh Minh and Grant McCool; Editing by Tomasz Janowski)