In comparison, the country's gross domestic product grew 4.5 per cent in the second quarter and 3.1 per cent in the first quarter.

The economy in the fourth quarter is expected to expand over 6.5 per cent, raising the country's 2009 overall growth to between 5 per cent and 5.2 per cent, says Vietnam News Agency, citing a forecast by the Ministry of Planning and Investment.

It says in the report that Vietnam is expected to have a budget deficit of 115.9 trillion dong in 2009.

The country's budget revenue is projected to be 390 trillion dong, down 6.4 per cent, while its budget spending is forecast to be 532.4 trillion dong, up 8.4 per cent, it said.

The country's exports will likely fall 2.7 per cent to $US61 billion ($70.2bn), while imports will likely drop 12 per cent to $US71bn.

Consequently, Vietnam's trade deficit will be $US10bn, compared with $US18bn in 2008, the ministry says in the report.

By Vu Trong Khanh - Dow Jones - September 21, 2009