Minister unveils major tasks for 2009

Minister of Planning and Investment Vo Hong Phuc has unveiled major tasks for Viet Nam in 2009 with priority given to reducing the inflation rate and stabilising the macro-economic balance, especially financial and monetary policies.

In a report delivered at the current session of the National Assembly Standing Committee in Hanoi on October 10, Mr Phuc said more efforts should be made to ensure the market laws of supply and demand to provide essential consumer goods and materials for economic sectors. It is necessary to boost production and business activities and increase the competitive capacity of the entire economy, each business and each product.

Mr Phuc underlined the need to develop agricultural production and rural affairs in line with the Resolution adopted at the 7th Party Central Committee, stimulate exports and keep a close watch on imports to reduce the trade deficit.

He said Viet Nam should continue to increase the capacity of its scientific and technological sector, improve the quality of education, vocational training and healthcare services, speed up salary reform, along with implementing social welfare policies to support the poor and low income earners.

Major socio-economic targets for 2009:

• GDP: 7%

• GDP per capita: US$1,200

• Export value: US$76.7 billion (up 18%)

• Development investment: VND725 trillion (40% of GDP)

• Budget overspending: VND87.3 triion (4.8% of GDP)

• Consumer price index: below 15%

• Job generation: 1.7 million

• Poverty rate: 12%

• Under-5 malnutrition rate: below 19%

Stable macro economy

According to Minister Phuc, Vietnam has achieved initial results in curbing inflation and stabilising the macro-economy over the past 9 months. The CPI has begun to fall since June. Notably, it rose by only 0.18% in September, the record low so far this year. The CPI is expected to rise by 24% by the end of this year.

Despite the global economic slowdown, Viet Nam has maintained a rather high economic growth, standing at 6.25% in nine months and is expected to increase by 6.5-7% by the end of the year. Major macro-economic balances such as the State budget, credit and international payment have stabilised. Foreign currency reserves have increased considerably, the trade deficit has gone down gradually, and foreign debts have been within limits.

Progress has also been seen in social, cultural, educational and healthcare development, administrative reform and the fight against corruption.

Challenges ahead

A supervisory report drafted by the NA Committee for Economic Affairs showed that nine of the 25 projected targets have not been fulfilled. Despite a gradual fall, the inflation rate has remained high, budget spending has surpassed the estimates, economic structuring has been slow going, and the disbursement of development investment capital sourced from the State budget and the sale of Government bonds have failed to meet their targets.

According to the committee, in 2009 and 2010, Vietnam should continue to implement a tight but flexible monetary policy, keep total means of payment and total credit balance under control, and allocate credit sources in a proper way to ensure the liquidity and growth of the banking system.

The committee stressed the need to increase the efficiency of public spending, reduce the budget deficit, and incorporate the annual development investment plan into the mid-term spending plan to make investment more efficient.

NA Standing Committee members will discuss and give opinions on the report on October 11.