Measures outlined to cut inflation

Vietnam was resolved to curb inflation, stabilise the macro-economy, ensure social security and achieve about 6 percent in GDP growth in 2011, said prime minister Nguyen Tan Dung at the monthly government meeting in the capital yesterday.
Reviewing the socio-economic situation in September and the first nine months of 2011, the cabinet members agreed that the country’s socio-economic development had stabilised, inflation had been kept under control and the consumer price index (CPI) in September had risen less than 1 per cent.

In the first nine months, the GDP growth was 5.76 per cent, in which industrial production saw an increase of 12 per cent compared to the same period last year; agriculture increased by 4.1 per cent; foreign tourists increased by 15.5 per cent; exports gained over $70 billion – an increase of 35.4 per cent; foreign investment increased by 0.2 per cent and more than 1.1 million new jobs were created.

However, in the period under review, the import-surplus was rather high – an increase of 26.9 per cent compared with the same period last year.

According to deputy prime minister Vu Van Ninh, in the last quarter of 2011, the demand for imports was expected to increase, putting pressure on foreign exchange and prices.

“This pressure might lead to high inflation,” said Ninh.

Participants at the meeting asked the government to continue to carry out a strict control on monetary policy while ensuring sufficient credit for production and business, particularly for agriculture, rural areas, electricity and small and medium enterprises.

Dung asked the State Bank of Vietnam SBV to focus more on the control of bad debt, particularly in real estate held by joint stock banks, while adopting measures to reduce the interest rate in line with inflation.

Dung promised that the government would extend support to agricultural production and small and medium enterprises.

He also asked ministries, sectors and localities to review and improve the efficiency of public investment with more focus on urgent projects which are to be completed soon, particularly those serving the people, agriculture and business production, as well as social security.

Regarding the performance of State owned enterprises (SOEs) over the past five years and orientation for the next five years, PM Dung asked the Ministry of Finance to develop a plan to renew SOEs, particularly the restructuring of corporations and economic groups.

Participants asked the PM to take actions against SOEs that had operated at a loss for several consecutive years and withdraw their capital investment in businesses which were not within their main trade.

Minister of Transport Dinh La Thang said in the remaining months of the year, his ministry would make the final decision on the fate of the Waterway Construction Corporation after prolonged bad performance.

Deputy prime minister Vu Van Ninh asked the government to come up with specific measures to overhaul the State Economic Groups and Corporations, speed up the equitisation of SOEs and come up with plans to settle their bad debt.

Vietnam News

Tags: Vietnam economic, Vietnam economic growth, Vietnam economy, Vietnam economy 2011, Vietnam inflation, Vietnam inflation 2011