GDP may reach 7 percentDr Nguyen Dinh Cung, Director of CIEM, confirmed that the Macroeconomic Report of the 3rd Quarter of 2015 was undertaken to update the practices of macroeconomic development and operation of macroeconomic policies of the third quarter and of first 9 months of 2015. Accordingly, the report is to evaluate the macroeconomic outlook of the fourth quarter of 2015 and give the policy recommendations on macro-economic management in the coming period in order to meet the requirements of development and reform.
GDP may reach 7 percentDr Nguyen Dinh Cung, Director of CIEM, confirmed that the Macroeconomic Report of the 3rd Quarter of 2015 was undertaken to update the practices of macroeconomic development and operation of macroeconomic policies of the third quarter and of first 9 months of 2015. Accordingly, the report is to evaluate the macroeconomic outlook of the fourth quarter of 2015 and give the policy recommendations on macro-economic management in the coming period in order to meet the requirements of development and reform.
According to Dr Nguyen Dinh Cung, Vietnam's economy in the first 9 months of 2015 had many positive changes; the prices and interest rates had been stabilised. In particular, Vietnam has made many flexible economic policies to deal with the disadvantages of the world economy and the region. Besides, Vietnam has used the advantages of multilateral trade agreements.
Referring to the report, Nguyen Anh Duong, Deputy Head of Macroeconomics Department of the CIEM, said that in the past 9 months, the government and the ministries issued many institutional frameworks and economic policies relevant to optimise the activities of the economy. Notably, Resolution 19/NQ-CP dated March 12, 2015 on the mission and key measures to improve the business environment and to enhance the national competitiveness of 2015 and 2016 has implemented and achieved certain results. Specifically, according to the forecasts, the economic growth of the fourth quarter of 2015 is estimated at 6.83 percent, and the whole year at 6.61 percent. Export growth in the fourth quarter, and for all of 2015, is forecast at 10.38 percent and 9.66 percent, respectively. However, if the economic growth of Vietnam’s partner countries is faster and the USA will not raise interest rates, the export growth rate of Vietnam in 2015 could reach about 10 percent. The trade deficit is US$500 million in the fourth quarter and accumulated at US$4.5 billion in 2015. The CPI will rise again, but stay at 0.28 percent in the fourth quarter.
In addition, the industrial and construction sectors continue as the main drivers for economic growth. The added value of this sector increased by 9.6 percent in the first 9 months, significantly higher than in agriculture, forestry and fisheries, and services. More optimistically, Mr Duong said that if the economic reforms continue in the coming quarter, the growth rate will exceed 7 percent.
"Blind spots"Despite forecasts of high economic growth, Mr Duong also noted the impacts of high level strategic reforms which Vietnam's economy needs to overcome, including equitisation of state-owned enterprises (SOEs), reforms in the agricultural sector, and political efforts.
Regarding the equitisation of SOEs, the report also pointed out the problems of the plan of 2014-2015 to reach the goals of equitising 432 SOEs. By the end of August, 2015, around 50 percent of the SOEs had been equitised. It is forecast that the institutional and legal frameworks regarding the operation of the state system will have significant changes. Accordingly, the ministries have actively completed and submitted the drafts on Enterprise Law and Management Law to give guidelines on using state-owned capital to invest in production, particularly documents related to forming a legal basis for firmer measures promoting equitisation, such as: the Decree on disclosure of the SOEs, the Decree on the use of state-owned capital for investment in business management and the use of funds and assets in the enterprises, and the Decree on monitoring and evaluating the effectiveness of information disclosure on the activities of the enterprise. The Ministry of Planning and Investment has finished drafts about the Prime Minister's decision on amending and supplementing the criteria and listing types of the SOEs; accordingly, the equitisation and divestment of the targeted enterprises have been promoted, the State no longer holds 100 percent of shares of most parent companies.
In the spirit of Resolution 19/NQ-CP, the measures to reform the macroeconomic foundation and facilitate the business environment and improve the competitiveness should be monitored and reviewed more closely and aggressively.
The policies on monetary, currency, and banking should be focused on the restructuring of commercial banks with a focus on handling bad debts and adjustments of the exchange rate in 2016 and building media contents affecting sharply the monetary management. Particularly, although it is hard to reduce the dominance of this policy in the short term, the policy makers should be aware of implications and challenges of implementing the policies on monetary, exchange rates and credits. Besides, it is necessary to disclose the construction and public debt repayment schedule in medium and long terms and control the state budget deficit in the 2016-2020 period.
From less optimistic perspectives of economist Pham Chi Lan, the economy is still facing many difficulties. Ms Pham Chi Lan said that the policies still are facing challenges, such as growing public debt and budget deficit. In 2015, the public debt has been increasing rapidly; Resolution 19 has not been supported from the ministries and localities, and both individuals and businesses have not benefited from the improvement of the business environment.
Former Director of the CIEM Le Xuan Ba said that although the economy has grown, the quality and outcomes of the economic growth should be reviewed. The economic growth of Vietnam is still unsustainable because it still relies on cheap labour and crude exports.
Anh Phuong
Vietnamese
