Difficulties facing Vietnam economy: PM

Difficulties facing Vietnam economy: PM

HANOI (Reuters): Vietnam's prime minister has warned that the Communist country is facing growing economic problems, with farmers suffering losses, industrial growth slowing and foreign investment on the decline.

Phan Van Khai told a meeting of cabinet ministers earlier this week that despite positive macroeconomic indications "severe challenges" lay ahead, some of which were already beginning to bite.

State-controlled press quoted him yesterday as saying that despite a record rice harvest, many farmers had been unable to sell their produce because of unfavorable price fluctuations.

At the same time, direct foreign investment is on the decline, industrial production is stagnating and the state sector remains inefficient and unreformed, he said.