The Vietnamese economy was only slowing down in the first half of 2009, not trapped into recession and is signaling recovery, Mr Nguyen Xuan Phuc, Minister and Chairman of the Government Office, asserted at a regular meeting of the Government Office in Hanoi on July 7.
Staying out of recession
At a press conference after the meeting on July 7, Deputy Minister of Planning and Investment Cao Viet Sinh informed that GDP growth was 3.1 per cent and 4.5 per cent in the first quarter and second quarter, respectively. The increase showed that our economy is riding out the bottom zone. Vietnam’s GDP expanded 3.9 per cent in the first half of the year. Industrial production advanced 4.8 per cent; agricultural, forestry and fishery production stabilised; service developed 5.5 per cent; stock market recovered and consumer price index climbed 2.68 per cent.
According to Mr Sinh, in addition to the growth of manufacturing and construction industries, the service sector with domestic sales soared 8.8 per cent, an admirable rate for many nations.
However, the global economic recession slowed down Vietnam’s GDP growth in the first six months of 2009. Many sectors are struggling to escape difficulties. Exports declined 10 per cent in the six month period and, to realise the target of 3 per cent growth this year, Vietnam has to double its efforts. With high credit growth, it is a heavy pressure to keep consumer price index at below 10 per cent, Mr Sinh affirmed.
Yet to trim stimuli
Before the information of reducing stimulus packages to ward off inflation, Mr Nguyen Ngoc Bao, Director of Monetary Policy Department under the State Bank of Vietnam, affirmed that the Government has not had any plan to make the change.
“According to the government assessment on the stimulus package, the interest rate subsidy is making positive contributions to averting economic slowdown and boosting credit growth to 17 per cent in the first six months of this year,” emphasised Mr Bao.
Mr Bao said banks and finance companies lent more than VND372,000 billion, in which short-term interest rate-subsidised loans accounted for VND347000 billion.
More than 78,500 non-state enterprises borrowed VND246,000 billion and more than 1.1 million households were lent over VND65,000 billion. According to Mr Bao, the government has no plan to reduce the interest subsidy.
Last six-month targets
Mr Phuc said Prime Minister Nguyen Tan Dung emphasised the importance of fending off economic slowdown to keep GDP growth at 5 per cent, rein inflation at 7 per cent or low and keep budget deficit at 7 per cent or lower.
Preventing economic slowdown is the top priority from now till the end of the year and the Government has no plans to trim the interest rate subsidy.
Mr Phuc said the Government has adopted many mechanisms and policies to enhance agricultural and industrial production; sharpen the country’s economic competitiveness; promote trade activities, export and market expansion; stimulate consumption and investment; and create favourable for enterprises and farmers through preferential credit policies.
Developing the Prime Minister’s requests, Mr Phuc said the industry must be guaranteed electricity, human resource and market. As regards investment, the country needs to take measures to resolve investment capital difficulties like State budget capital, ODA, FDI and government bond proceeds. It is important to disburse all required capital with highest requirements.
Prime Minister Nguyen Tan Dung ordered ministries, sectors and local authorities at all echelons to continue solutions for anti-corruption in the time to come. Administrative procedures need to be made public.
Huong Ly
Vietnamese
