Macro-economy sees more positive signs: PM Dung

Macro-economy sees more positive signs: PM Dung

Vietnam’s macroeconomic situation has seen many positive signs amid the world gloomy picture in the first nine months of this year, said Prime Minister Nguyen Tan Dung during the opening session of the 4th National Assembly meeting in Hanoi.

The global economic slowdown and its complicated development have placed a negative impact on an open economy like Vietnam, said Prime Minister Nguyen Tan Dung.

Locally, the tightening of monetary and fiscal policies for curbing inflation has resulted in lower domestic demand and large inventories which made it hard for local businesses to access credit for production.

Such an international and local economic context had erected a real challenge for local policymakers and operators in 2012, the Prime Minister said.

However, in the first 9 months of 2012, as the Government persistently targeted inflation control and macroeconomic stability, focusing on cautious fiscal policies, the macroeconomic situation have seen some real progress in a number of criteria.

Specifically, inflation is still under control, which rose 5.13 percent during the period. The targeted inflation will be kept at 8 percent by the year-end.

Regarding the monetary market, compared with the beginning of the year, interest rates are on a slide, while liquidity has been improved significantly with deposits increasing by 12.7 percent.

With the foreign exchange rates stable, the confidence in the Vietnam dong has been strengthened, thus lessening the use of gold and foreign currencies as means of payment domestically.

Regarding foreign trade, export revenues rose 18.9 percent to $83.79 billion, while import revenues rose 6.6 percent to $ 83.76 billion. The equivalent growth rates for the year’s end are estimated at 16.6 percent and 6.8 percent respectively.

The 2012 trade deficit is expected at about $ 1 billion, equaling 0.9 percent of export earnings.

Foreign exchange reserves are currently equal to over 11 weeks of imports, the international balance of payments enjoy an $8 billion surplus.

Gross domestic product growth reached 4.73 percent, and is estimated at 5.2 percent for the whole year, lower than the initial target. However, the growth rate is getting better quarterly.

To achieve the targeted growth rate, the GDP growth in Q4/2012 must be at 6.5 percent, up dramatically from the 5.35 percent growth in the third quarter, the Prime Minister said.

Inventory, bad debt clog resource flows

However, some members of the NA Economic Committee said that the Government's report on macroeconomic situation has some misleading assessments, as the data are yet to fully reflect reality, especially difficulties challenging local enterprises.

Among 15 macroeconomic targets, the five which cannot be achieved by year-end are the most important indicators.

Specifically, according to the committee, reduced inflation and trade deficit, on the other hand, showed signs of the stagnation of the economy.

According to many, the fact that inflation went down faster than expected, posting negative rates in June and July, along with the continuous decrease in trade deficits, suggests that local aggregate demand is really shrinking.

Though the local banking system is in excess liquidity, local businesses still find it hard to access credit.

The economic restructuring process has been underway, but the implementation has so far showed no clear results.

Inventory and bad debt are clogging the national resource flows.

The nine-month tax collection reached 67.3 percent of targets, the lowest in recent years, while the ability to collect during the rest of the year faces a real challenge, affecting the implementation of the socio-economic goals, said Nguyen Van Giau, chairman of the committee.

In addition, the committee said the poor coordination between central and municipal levels in price management has resulted in the recent price spikes, having a bad impact on market sentiment.

With a negative credit growth for many months, a 2.35 percent growth in January-September cannot offset bad debts which rose from 3.07 percent in late 2011, according to a report of the State Bank of Vietnam.

Chairman Nguyen Van Giau said the Economic Committee members were in favor of economic indicators in 2013 proposed by the Government, including the 5.5 percent GDP growth, a 10 percent export revenue rise, an 8 percent trade deficit, and an 8 percent inflation rate.

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