Deputy head of Ho Chi Minh City National Assembly Delegation Tran Du
Lich said over-emphasis should not be placed on gross domestic product (GDP)
growth, as securing confidence from local people, businesses and investors was
more important.
The macroeconomic index has
become better from quarter to quarter. Did this entail more confidence from
businesses, investors and local people in macroeconomic management policies?
GDP expanded 4 per cent in the
first quarter, surging to 4.66 per cent in the second quarter and then 5.35 per
cent in the third quarter. Banks’ lending rates fell 5-8 per cent against the
end of 2011. Albeit September’s consumer price index (CPI) spiked, it is likely
that full-year CPI growth will be reined in between 8-9 per cent as projected.
A declining trade deficit as we eyed a $34 million trade surplus in the first
nine months has contributed to stabilising the exchange rate and hiking foreign
currency reserves.
The general economic landscape
seems to be positive at a glimpse. However, there persist drawbacks.
Thereby, the confidence of
businesses, people and investors into macroeconomic management policies has yet
to be improved.
Is that too tough a comment?
No. That is because competent
state agencies have neither pointed out weaknesses of the economy nor presented
effective remedies to radically tackle them.
The GDP growing from quarter to
quarter is not a special phenomenon this year as was the case for many years.
Inflation was basically under control in the first eight months, but it
escalated in September, triggering concerns over a possible comeback of
inflation. This concern is not groundless since we have dealt with inflation in
a passive manner, therefore when some factors affect aggregate demand,
inflation immediately raises its ugly head.
Falling imports came on the back
of sinking investment and production demands, particularly from domestic
economic sector and this will hurt GDP growth. Bank rates fell, but firms found
it hard to get loans seen in merely 2.52 per cent credit expansion against 5.13
per cent inflation rate, meaning the capital sources for the economy could not
be properly addressed albeit bank rates fall further.
Assuming that the score ladder of
businesses’ confidence into macroeconomic management policies is 100, what is
current confidence rate, in your view?
Explicit surveys are needed to
deliver objective scoring. I have not made any concrete survey. However,
through communicating with people, businesses and investors I found they had
concerns over policies on ensuring macroeconomic stability, market development
and production-business support.
The Vietnam Financial Information
Services Company’s just released business confidence index (BCI) for 2012’s
third quarter after surveying 110 businesses from assorted economic sectors
leading the country in brand valuation, asset and revenue figures and number of
labourers. The third quarter BCI fell 13 points to 107 against the second
quarter.
How can confidence be regained?
We should not over-emphasis GDP
growth in 2013. More importantly, we must strive to put macro economy on an
even keel and secure the confidence of people, businesses and investor
community. There needs to be concrete measures to help businesses orient
investment and work on long-term production and trading plans.
Issues like banks’ bad debt and
unhealthy competition among banks to lure depositors must be shortly and
radically settled to cultivate confidence.
Manh Bon | vir.com.vn
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