Inflation Control Remains Strategic Objective

Minister, Chairman of Government Office Vu Duc Dam said, “Inflation will be kept at a single-digit rate, as low as possible. This is the commitment and action of the Government to provide most practical and effective support to enterprises.”

 

In January, the State Budget collected a total of VND61.5 trillion, equal to 8.3 percent of the full-year estimation, but it expended VND65.4 trillion, or 7.2 percent of the full-year projection. State Budget income was significantly reduced in January because of the long New Year holidays and business difficulties facing major taxpayers like cement, automobile and steel producers.

 

The State Budget-funded development investment capital was VND11.4 trillion in January, equal to 6.3 percent of the yearly estimation; foreign direct investment reached US$400 million, equal to 95 percent of the same period in 2011, ODA disbursements were estimated at US$72 million, of which loans accounted for US$50 million and non-refundable aid was projected at US$22 million.

 

Growth rates of many economic sectors in January were lower than in the corresponding period of 2011, because persistent cold weather hurt agricultural production in northern provinces. Production and business operations of enterprises, especially SMEs, continued to face difficulties due to reduced demand and high interest rates. Long New Year holidays impacted the production and business operations of many industries.

Growth rates of some economic sectors were good in the first month of 2012. The total revenue of retail sales of goods and services rose remarkably, by 22 percent compared to the same period of 2011. Total export and import turnover in the reviewed period was estimated at US$6.5 billion and US$6.6 billion, respectively.

 

Minister Vu Duc Dam predicted that the world economy would face more difficulty in 2012 and Vietnam would have to resolve a lot of weaknesses and limitations. The Government of Vietnam urged all relevant units to focus on resolutions and policies provided by Government Resolution 01/NQ-CP dated January 3, 2012 on leading solutions for socioeconomic development planning and State budget estimation for 2012 in February and subsequent months.

 

He pointed out that the Government would give priority to applying necessary measures to bring inflation to a single-digit rate by means of flexible, tight fiscal and monetary policies and reasonable tax policies to spur production and business activities and create jobs, thus laying stronger groundwork for stabilising the economy and building confidence among businesspeople and the public. 

 

The Government is directing ministries and branches to support production and business activities, particularly industrial and agricultural production, from the start of 2012. Vietnam will speed up export-oriented industries, particularly those with high added values, high competitiveness and a good position to enter global supply chains; give priority to agricultural production investment; utilise the advantages of socioeconomic stability to attract external funding sources (ODA, FDI, FII and remittances); seek investment opportunities in emerging markets; and focus on attracting international tourists.

 

To resolve difficulties facing enterprises, exporter support policies will be continued, said Minister Dam. Particular focus will be paid to essential goods whose demand is less affected by crisis and international markets. This approach helps Vietnam develop its economy and create jobs for people.

 

In addition, the Government will guarantee sufficient capital for vital projects in the service of people and production activities, particularly those with a good impact on production, agricultural and rural development.

Minister Dam added that the Government will complete the public investment restructuring scheme, commercial banking system restructuring, and State-owned enterprise restructuring soon.