By Huang Haimin Thai Thanhvan     

    HANOI, Dec. 7 (Xinhua) -- Vietnam's economy experienced rapid and stable progress in 2007 with an estimated annual gross domestic product (GDP) growth of 8.5 percent, the highest level over the past 10 years. But the country still faced some challenges.

    Vietnam's GDP is set to reach 71.3 billion U.S. dollars in 2007,or per capita GDP of 835 U.S. dollars, according to a recent report of the Ministry of Planning and Investment (MPI).

    The country's poverty rate is estimated to drop to 14.7 percent this year from 18 percent last year, said the report.

    Vietnam is changing from a poor country to a prosperous one. Inbustling metropolises such as Hanoi and Ho Chi Minh City, luxurious hotels, restaurants and shops are mushrooming to serve not only an increasing number of foreign tourists and businesspeople, but also more and more local middle class.

    With an active economic development and a big young population eager for education and enjoying modern consumer goods and services, Vietnam has become more attractive to foreign investors. The country posted the biggest-ever foreign direct investment (FDI)in the first 11 months of this year: 15 billion U.S. dollars.

    Many giant international firms are seeking business opportunities in Vietnam. Posco of South Korea, the world's third largest steel producer, wants to build a steel facility and coal-fueled power plant in Vietnam's central region with a total investment of 5.8 billion U.S. dollars.

    Japan's Sumitomo plans to pour 3.5 billion U.S. dollars to construct a coal-fired electricity plant with capacity of 2,640 MW in central Khanh Hoa province.

    Vietnam is expected to lure FDI of 16 billion U.S. dollars in 2007, up from 10.2 billion U.S. dollars in 2006, and 6.4 billion dollars in 2005.

    Besides achievements in luring FDI, Vietnam has been successful in promoting export, one of its major incomes. The country is estimated to earn 48 billion U.S. dollars from shipping goods abroad in 2007, up from 39.6 U.S. billion dollars in 2006. Its exports to some key markets such as China, the United States, Japan, and the European Union are expected to rise.