Oct 18, 2012

Vietnam - Lawmakers express concern over economy

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VietNamNet Bridge – Despite positive results handling inflation and deficit reduction, law makers expressed concern that Viet Nam's economy is facing signs of stagnation at yesterday's 12th session of the National Assembly's Standing Committee.

Discussing of the country's socio-economic and State budget in 2012 and plans for 2013, deputies said the Government should declare comprehensive measures and policies promote the economic restructuring process and reform of growth models.

Deputies also agreed the Government should continue to control inflation, macroeconomic stability and flexibility in monetary policy management. They felt priorities should be helping enterprises reduce amounts of surplus stock, handling stagnant debts from state invested projects and speeding up the disbursement process of State budget capital projects.

The Government estimates that economic growth will increase by 5-5.5 per cent this year, below the NA target, while CPI will reach the 8 per cent goal by the end of 2012.

Macroeconomic stability and inflation is controlled but the risk of high inflation sill remains, according to NA Economic Committee Chairman Nguyen Van Giau.

Unreasonable management and slack monitoring of market activities in a number of areas have stunted consumer confidence, exacerbated by increased medical and education fees nationwide, which have pushed the CPI ever higher, according to Giau.

The Government report said only 10 out of 15 NA socio-economic targets will be met or exceeded. Five others are forecast to fall short including GDP growth rate; rate of gross investment capital for society development compared to GDP; job creation; poverty reduction; and forest recovery rates. The majority of failed targets are those that are vital indicators of economic sustainability in the medium to long term.

Deputies said that pressure to meet future targets will increase due to the growth rate shortfall, as well as the sub-par job creation and poverty reduction figures.

Planning and Investment Minister Bui Quang Vinh said bad debt is high in many industries, including plastics, processing, tobacco and heavy industries like cement, steel and manufacturing.

"Measures are needed to encourage consumption in these fields through the expansion of consumption markets domestically and abroad," said Vinh.

He also added that around 40,000 struggling enterprises need help to access preferential loans.

Next year, the Government is aiming for GDP growth of 5.5 per cent, a CPI increase of 7-8 per cent and trade deficit at roughly 8 per cent of total export turnover. Budget deficit is aimed to be below 4.8% of the country's GDP; with 1.6 million jobs being created and the national poverty rate falling by 2 per cent.


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