World Bank to lend $ 350 million interest-free for 40-years to Vietnam to prop up the budget

HANOI, Aug 7 – The World Bank said on Friday it will lend Vietnam $ 350 million to prop up the budget this year as part of a poverty reduction credit scheme and to help Hanoi cope with the economic slowdown.

The $350 million budget injection comes in the form of a 40-year interest free loan, a World Bank spokesman said.

The Vietnamese government is facing a budget shortfall this year that some economists project to be 10 percent of gross domestic product or more, in part due to stimulus spending.

Hanoi has been able to raise only a fraction of the amount it had hoped through bond auctions, with investors holding out for higher yields and the state treasury unwilling to raise its yield ceiling.

Since 2001, the World Bank has provided $ 1.325 billion and mobilized $ 817 million from other donors for Vietnam for poverty reduction and economic development efforts under the PRSC scheme.

Last year, the World Bank gave $150 million, its data showed.

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