The Government in the last regular cabinet meeting of 2011 has urged its members to join forces to curb inflation and stabilize macro economy this year.
Vietnam gained initial results from implementing the austerity package contained in Resolution No. 11 last year, with the consumer price index (CPI) growth rate slowing down from the second quarter. Lending rates also fell while export surged by 33.3 percent compared to 2010.
Vietnam achieved a GDP (gross domestic product) growth rate of 5.89 percent in 2011, of which primary industry grew 4 percent, industry and construction rose 5.53 percent while service jumped 6.99 percent.
However, according to the Ministry of Planning and Investment, the country saw increasing signs of macro uncertainties due to drastic directions from the resolution.
Fast credit growth rate, shortcomings of the real estate market and of the banking system due to poor liquidity, and bad debts had led to higher-than-allowed capital mobilization. The gold market also suffered wild volatile developments during the year.
Despite the Government’s tightening fiscal policies, total investment still surged strongly last year. Up to over 680 projects using VND1.7 trillion of the State budget, which were not allowed to kick-start in 2011, were still implemented.
Macro uncertainties also hurt the business community as tens of thousands of small and medium-sized enterprises went bankrupt. Many sectors like construction, cement and steel faced challenges.
Prime Minister Nguyen Tan Dung also named a number of shortcomings that need to be tackled in 2012, including the low quality of legal documents, poor planning and management of natural resources, pressing environmental pollution and traffic congestion and accidents.
According to the cabinet’s latest Resolution No. 01/NQ-CP, in 2012, the Government aims to attain a GDP growth rate of 6 percent - 6.5 percent and total export turnover growth of 13 percent, keep trade deficit at 11 percent – 12 percent of total export value and the consumer price index under 10 percent.
Under the resolution, credit growth will be pulled down to around 15 percent - 17 percent, total money supply growth at 14 percent -16 percent, while budget deficit will be kept under 4.8 percent of the GDP.
At the meeting, the Ministry of Planning and Investment submitted to the Government a draft project on improving the efficiency of State-owned enterprises (SOEs).
Regarding the project, Prime Minister Dung said that restructuring SOEs was solely aimed to better their performance so that they would be able to play the leading role in boosting socioeconomic development, stabilizing macro economy, securing macro indexes and others.
The ministry will be responsible for collecting comments from ministries and sectors to finalize the project.
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