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Economy in the second half: not yet out of the woods |
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Monday, 12 July 2010 |
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Statistics show that the country’s economy in the first half of this year is showing signs of bouncing track with a GDP growth rate of 6 percent and a CPI of 4.78 percent. However, economic growth is not sustainable.
Huynh Dac Thang: deputy head of the Planning Department under the Ministry of Industry and Trade: Tightly controlling and managing the marketIn the first half of this year, the country’s economy is still experiencing difficulties. However, thanks to the strict implementation of the Government’s measures, the national economy has made significant progress. The macroeconomic balance is stable, exports have increased and inflation is under control.Exports in the second quarter increased by 23 percent compared to the first quarter. Thus, exports in the first half reached 53 percent of the yearly set plan. If there are no wide fluctuations in the world economy it is estimated that exports will surpass the National Assembly’s set target by 12 percent.In the reviewed period the trade deficit stood at US$6.7 billion, equal to 20.9 percent of exports and surpassing the NA’s set target by 20 percent. However, since April imports have been slowing down while exports have picked up with the import/export figures for April, rising by 18.6 and 24.9 percent, for May by 19 and 37.5 percent and for June by 20.4 and 24.7 percent. With this steady growth rate, Vietnam will be able to keep the trade deficit at below 20 percent.As a point that, the country’s economic growth still depends on investment, recently, the Government devised a number of measures to improve the added value of products but has failed to obtain the expected results.Regarding mass imports of agricultural products from regional countries affecting domestic production, the Ministry of Industry and Trade (MoIT) insisted that imports be controlled by technical barriers, instead of protectionist measures because Vietnam has to follow its World Trade Organisation’s commitments. The MoIT has worked with the Ministries of Agriculture and Rural Development and Science and Technology to devise strict technical barriers to limit the entry of agricultural products into the country.Despite a decline in the consumer price index (CPI), inflation is likely to raise its ugly head in the late months of the year. The MoIT has worked closely with local departments and authorities to strengthen market management and strictly penalise speculation, smuggling, trade fraud and providing false information while stepping up the campaign “Vietnamese use Vietnamese products” nationwide.Tran Dinh Thien: Director of the Vietnam Economics Institute: specific measures needed to stabilise priceThe EU is very important for Vietnam, including exports, imports and investment. The EU’s crisis which made the euro fluctuate will affect the country’s economic development.The economic experts estimated that the euro fluctuation will slow Vietnam’s economic growth by 1.2-1.4 GDP per year. This excludes the wider-reaching effect as the EU crisis will affect China, the US and Japan. Therefore, Vietnam must closely follow the situation and come up with a proper assessment to minimize the negative impact.At present, big cities, such as Hanoi and Ho Chi Minh City are carrying out measures to stabilise prices. However, these measures have short-term effects and are costly so they cannot last for long.Price stabilisation in the long-term period must include a long-term socio-economic development strategy. Furthermore, it should include countermeasures on prices, interest rates and exchange rates on a monthly, quarterly and yearly basis.In the reviewed period, price hikes were contained, but the CPI for consumer goods was higher than that of goods for production. This created implicit causes for rising prices in coming months. Therefore, it is very important to contain inflation in the second half of this year.Vu Xuan Thuyen: senior expert of Business Development Department of the Ministry of Planning and Investment (MoPI): Promoting investmentForeign direct investment in the first half of this year hit US$8.43 billion, including US$5.1 billion worth of implemented capital. The total number of new foreign invested projects is 164, accounting for 34 percent. Six months saw 36,300 newly-established businesses with a total investment capital of VND222.2 billion, up 113.3 percent compared to the same period last year.This is a positive sign for the national economy. It also demonstrates that both foreign and domestic investors trust in the Government’s open and transparent policies. In addition to minimising expenses to join markets and regular monthly meetings with businesses, the Prime Minister often holds talks with businesses to remove difficulties.
The MoPI will step up the national investment promotion programme in the near future, find new markets and attract potential foreign investors to generate more jobs for local people.
(Source: CPV)
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