Hanoi  - Vietnamese economists Thursday worried about a return of inflation after calls were made at a national advisory body meeting for the government to launch a second stimulus package to boost the economy.

Vietnam's National Committee for Monetary Policy (NCMP) met Tuesday to review Vietnam's macroeconomic policies since the start of the global economic downturn. Several experts at the meeting called for another economic stimulus package, in addition to the
1-billion-dollar stimulus package the government began implementing in January.

Economist Tran Hoang Ngan of Ho Chi Minh City Economic University said that if the initial package was allowed to run out, it could cause a sudden rise in interest rates and a shock to the economy.

Le Xuan Nghia of the National Committee for Financial Supervision told the German Press Agency dpa that the 1-billion-dollar stimulus was only the first tranche of a total of 8 billion dollars that the government plans to spend through 2011, focusing mainly on infrastructure.

But other economists worried further stimulus could lead to excessive monetary expansion, with a risk of inflation. Inflation hit 23 per cent in 2008 before the government clamped down on credit growth.

"I think it is better to examine the effectiveness of the first demand stimulus package before introducing any more economic stimulus," said senior Vietnamese economist Le Dang Doanh.

Doanh said the first stimulus package had not been presented for public discussion, meaning that small enterprises have been unaware they can access the credits.

Ineffective economic stimulus packages could lead to high credit growth, which already stands at 22 per cent for the first seven months of the year, he added.

"The Vietnamese government planned to cap credit growth between 25 and 27 per cent in 2009, and it will be very difficult for them to limit credit growth to just 3 to 5 per cent for the rest of the year," Doanh said. "It is impossible to boost the economy without money."

In early June, the Hanoi office of the International Monetary Fund recommended the government shift its focus from stimulating the economy to restraining monetary expansion.

The Vietnam Investment Review magazine reported this week that credit growth in the first half of the year had pushed the State Bank to tighten credit expansion for the rest of 2009 over inflation fears.

But Nguyen Dinh Cung of Vietnam's Central Institute for Economic Management said Vietnam had enough experience to control any inflation caused by economic stimulus packages.

Vietnam began implementing its first stimulus package with money drawn from foreign currency reserves. The main expense has subsidized low-cost loans at 4 per cent interest for businesses that preserve jobs. (dpa)