The Ministry of Planning and Investment (MPI) reported that nine out of 22 socio-economic development targets for 2011 had fallen short projections.
For instance, the economy just grew 5.89 per cent against a projected 6 per cent and far below 6.78 per cent growth in 2010.
Besides, businesses, the driving force to economic growth, were on the back foot in 2011. Accordingly, newly founded businesses shrunk 7.2 per cent in number against 2010 and 53,792 firms went dissolved or stopped operations, surging 24.7 per cent against 2010.
“This stemmed from economic vulnerabilities, sovereign debt crisis afflicting many countries and causes rooted years ago from inner the economy,” said MPI Minister Bui Quang Vinh.
Based on a National Assembly Economic Committee survey, 2011’s 18.13 per cent inflation was not only a record over the past 20 years in Vietnam, but also put Vietnam among the top four countries in consumer price index (CPI) growth behind Kenya 18.93 per cent, Tanzania 19.8 per cent and Venezuela 26 per cent.
Vinh had attributed soaring CPI growth to a slowly revised and improper growth model and low economic efficiency.
“Besides, parallel to revised prices of several essential commodities to fit market rules Vietnam reported a$9.84 billion trade deficit, meaning we imported inflation on the back of soaring input costs globally,” said Vinh.
National Assembly Economic Committee chairman Nguyen Van Giau assumed total money supply and credit growth in 2011 was not only low compared to previous years but extremely low against central bank’s monetary policy governance commitment and actual demand of the economy. In fact, total money supply grew 12.37 per cent against 15-16 per cent projection and credit expanded 14.7 per cent against less than 20 per cent proposed.
“The government needs to make comprehensive appraisals of state tax and finance support for firms in 2011 as even with supportive policies the business community featured impaired financial capacity and escalating illegal capital appropriation cases making massive numbers of firms going bust,” said Giau.
To help firms get through current tough period Vinh said the State Bank, MPI and Ministry of Finance are doing independent surveys of firms’ production and business to find the real cause behind firms’ current predicament. VIR