Vietnam - Socio-economic development plan reviewed by committee

Members of NA Standing Committee yesterday discussed ways to implement the socio-economic development plan for the rest of this year.

Minister of Planning and Investment Bui Quang Vinh said inflation remains under control at 0.16 per cent in March, and the growth of the Consumer Price Index (CPI) this month is below 0.1 per cent.

He said these factors have contributed to stabilising the economy and market.

However, Nguyen Van Giau, chairman of the NA Economic Committee, said there have been some difficulties in reaching the targets of socio-economic development.

He said the growth of Gross Domestic Product (GDP) in the first quarter reached only 4 per cent, lower than the targeted 6-6.5 per cent. The Index of Industrial Production (IIP) increased by 4 per cent over the same period last year, marking the lowest growth margin in the past years.

The inventory index of processing and manufacturing industries was up nearly 35 per cent over the same period last year, while the consumption index only increased by 0.5 per cent.

Members of the NA Economic Committee agreed that these statistics indicate a reduction in production, and the low growth of CPI showed a decrease in total demand that has negatively affected the economy.

They also agreed that the economy could suffer from higher pressure on the increase in prices starting in the second quarter this year.

Minister of Finance Vuong Dinh Hue said incomes for the State Budget in the first quarter reached nearly VND173 trillion (US$8.2 billion), equivalent with 23.3 per cent of the budget estimates that predicted the incomes from export-import activities would remain very low.

Deputy chairwoman of the committee Nguyen Thi Kim Ngan said in spite of difficulties and some poor results in economic growth and production, the targets of socio-economic development should not be lowered, especially the goal of economic growth at 6 per cent. Instead, she insisted, feasible solutions should be put forward.

All members of the committee were in agreement with this suggestion.

Minister of Planning and Investment Vinh proposed three main solutions to ensure the success of this year's socio-economic development plan: to control inflation and stabilise the economy, to boost production and trading activities and to improve the quality of human resources.

He said it would be necessary to manage the loans of the Government and public and to maintain supportive financial policies for small- and medium-sized enterprises to help them weather the difficult period, especially those in the processing and export production industries.

According to Vinh, the Government plans to continue lowering interest rates and boosting consumption to reduce enterprises' inventory.

He added that the Government started to implement the development plan for human resources based on the demands of specific industries.

Giau said it is necessary to raise the Government's ability to forecast economic developments so that it would be able to respond quickly and implement suitable measures as the situation changes.

He said the Government needed to observe markets at home and abroad in order to apply proper supply and demand control methods and stabilise the domestic market, especially the prices of goods necessary for production and daily life.

Members of the NA Economic Committee agreed that enterprises need to solicit the Government's assistance in developing their markets and introducing their products to regional and international markets, as well as raising their management ability and competitiveness.

They also agreed that although the Government created more chances for enterprises to access capital resources, it is necessary to prevent the increase of bad loans.

Giau said tax policies should be adjusted to suit the current situation and certain fees should be carefully considered to avoid raising production expenses of enterprises.

It would also be necessary to boost effective tools to manage and monitor the usage of the State budget and public assets, he said.

Hue suggested that the relevant agencies strictly manage tax collection and tax loans as well as implement price adjustment based on the market to avoid a "shock" in the economy.

Nguyen Sinh Hung, chairman of the NA Standing Committee, said effective solutions should be implemented soon to hold inflation this year at 9 per cent and economic growth at 6-6.5 per cent to ensure the success of other goals related to social security, hunger eradication and poverty reduction, health, culture and traffic safety.

With these discussions , the NA Standing Committee ended its 10-day working session.

VNS

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