Economic growth still a concern
By Tu Hoang - The Saigon Times Daily
HCMC – The Government has set an economic growth target of 6-6.5% for 2013, the same as this year, despite the economy experiencing a downturn.
Directive 19/CT-TTg, recently signed by Prime Minister Nguyen Tan Dung, requests ministers and local agencies, along with State groups and corporations, to map out plans for socio-economic development next year.
In the directive, the Prime Minister highlights that the main focus of next year is carrying out the policies on monetary, credit, taxation, land and administrative reform to remove the difficulties in production and business, as well as boost growth.
However, the directive states that macro-economic stability remains a priority next year. The document specifies flexible and prudent monetary policy is aimed to stabilize the macro-economy, support production and business, restore growth, curb inflation and keep the currency value stable.
In addition, the Prime Minister calls for policy consistency in the market-driven price management of power, coal, fuel and public services, meeting the targets of inflation restraint and macro-economic stabilization.
GDP growth was only 4% in the first quarter and is estimated to reach 4.5% in the second quarter. In a report sent to the National Assembly (NA), the Ministry of Planning and Investment said the economic growth target of 6-6.5% this year is very hard to achieve due to the difficulties at home and abroad. The ministry forecast this year’s growth may only reach 5.5-6%.
However, Minister of Planning and Investment Bui Quang Vinh committed to strive for growth of at least 6% in 2012.
He said: “If failing to achieve 6% growth, our economy will leave dire consequences on jobs, multiple businesses would go bust, the economy could not develop, and social security issues could not be resolved. Therefore, the minimum growth must be 6%.”
Meanwhile, many NA deputies said the Government had tightened the monetary policy so much that the economy fell into a downturn, and CPI dipped to 3% in the year’s first half, lower than the goal of below two-digit level passed by the NA late last year.
Deputy Nguyen Ba Thuyen of Lam Dong Province complained: “We have cut down on too many (public investment projects) under the spirit of Resolution 11, which obviously has lead to economic impoverishment.”
The minister of finance and the governor of the central bank pledged to gradually loosen the fiscal policy and the monetary policy to support the economy and businesses. However, NA deputies expressed a concern that this will pose a risk of returning high inflation in 2013.
Minister Vinh said the economic growth target in the 2011-2015 period had been lowered to 6.5-7% at the 11th Party Congress, instead of the 7-7.5% given earlier.
“That is a brave and straightforward look into the reality which has been approved by the NA,” he told a recent NA meeting.