HANOI - THE Vietnamese government will unveil an economic stimulus package worth US$6 billion (S$8.89 billion) later this month, state media quoted Deputy Prime Minister Nguyen Sinh Hung as saying on Monday.

Previously, the government had said it would pour US$1 billion into the economy to try to avoid a serious slowdown.

Some of the funds would be invested in schools, hospitals, rural infrastructure and home construction, as well as projects to spur production and consumption, Tuoi Tre newspaper quoted Mr Hung as telling business leaders in Hanoi.

'We need to act now to boost production and consumption and maintain growth at 6-6.5 per cent in 2009,' Tien Phong (Vanguard) newspaper quoted Mr Hung as saying.

The Communist-run government projects gross domestic product growth of 6.7 per cent this year and 6.5 per cent next year. The IMF has forecast 5 per cent for next year.

Mr Hung said the government would announce details of the package, which would be worth 100 trillion dong, or about US$6 billion, rather than US$1 billion, later this month, the Tuoi Tre (Youth) daily reported.

The government would also provide guarantees to help companies borrow up to US$2 billion from foreign banks, Tien Phong reported.

Faced with a rapidly overheating economy earlier this year, the Vietnamese government and central bank put the brakes on economic activity, tightening credit and raising interest rates.

In recent weeks, however, with inflation moderating and global economic storm clouds gathering, the government has quickly lowered rates and taken other measures to spur growth. -- REUTERS