Economists: Vietnam Govt Needs to Harmonize GDP Growth and Inflation

The government of Vietnam should balance GDP growth rate and inflation and focus on restructuring investment projects in the face of the global recession, Vietnam News Agency said, citing leading economists.

 

“In the global recession, certainly a drop in prices will occur as consumers stop spending, and of course Vietnam’s exporters will face difficulties. If we want to maintain production, we must shift from export-oriented production mindset to more domestic oriented consumption,” Tran Du Lich, director of the Ho Chi Minh City’s Economics Institute said.

 

The government should harmonize GDP growth rate with inflation control and GDP growth rate should be more than 6 per cent, otherwise social problems will emerge particularly the unemployment as one million young people join the labor forces every year, Mr Lich proposed.

 

Priority for 2009 for the government to do is to restructure investments with suitable investment projects that address urgent needs of citizens and the country’s socioeconomic development and effectively manage cash flow.

 

The government can mobilize capital sources via issuing bonds, state-owned enterprises should be permitted to issue bonds, and the Ministry of Finance should act as a CFO of the country.

 

Meanwhile, Le Dang Doanh, a lead economist suggested that the government increase spending only on investment and construction projects which are effective and will generate returns and have transparent investment information.

 

“Encouraging people to increase their purchasing power should go hand in hand with financial reform,” Doanh proposed.