Inflation is not a major concern in 2013 as it can be kept at a lower level than last year, Cabinet members shared the view at their monthly meeting on June 27.
Participants reviewed the socio-economic situation in June and the first half of this year, the implementation of Government resolutions, inspection, and anti-corruption work, administration reform, and other issues related to the restructuring of the Vietnam Shipbuilding Industry Group (Vinashin), Vietnam Airlines’ projects to purchase airplanes and revised Customs Law.
GDP up 5% in Q2
Minister of Planning and Investment Bui Quang Vinh said the macro-economy has grown significantly.
Many economic sectors have contributed to raising the country’s GDP level to 5% in the second quarter of this year, (higher than the first quarter) and to 4.9% in the first half of this year.
Industrial production, especially in the processing and manufacturing sectors is now back on track, while the services sector shows some significant growth.
Export earnings are higher than the set targets but import surplus is lower.
Minister Vinh spoke of coordinated efforts by ministries and departments to strictly implement policies and measures proposed by the Prime Minister to control market prices, keep a balance between supply and demand, and prevent illegal trade in fake and counterfeit products.
In the second half of this year, it requires greater efforts to strictly control the prices of electricity, petroleum, and fertilisers and other essential commodity goods.
According to the Ministry of Planning and Investment, the State Bank of Vietnam’s decision to cut deposit and loan rates in the first half of this year has helped iron out snags in business operation.
The amount of deposits and loans is increasing to ensure bank liquidity. Credit growth declined in January but began to go up as of February.
The Vietnam Asset Management Company (VAMC) will be put into operation in the near future to help deal with bad debts and accelerate the flow of capital in the remaining months of this year.
Exchange rates tend to increase slightly and the foreign exchange market is rather stable. The SBV is now capable of buying large amounts of foreign currencies for reservation.
However, Minister Vinh said there remain difficulties and challenges to overcome as macroeconomic growth is not really stable. Although inflation is under control there is some risk that it can rear its ugly head time and again. Even enjoying lower interest rates, not all businesses can access capital easily.
In addition, the State budget collection is still lower than the previous years’ level. The people’s living conditions, especially in remote, mountain and other disadvantaged areas are not much improved as expected.