July, 23 2010 10:34:50

Growth targets ‘are achievable'

HCM CITY — Key national economic targets set for this year – a gross domestic product (GDP) growth of 6.5 per cent, inflation below 8 per cent and macro-economic stability – were achievable, a senior official said yesterday.

Le Duc Thuy, chairman of the National Financial Supervisory Committee, said at an investment conference in HCM City that the economy showed clear signs of recovery in the first half of the year with all sectors achieving a higher growth rate than the same period last year.

First-half GDP rose by 6.16 percent against the same period last year, he said, adding that agro-forestry and fisheries sector grew by 3.31 per cent, industrial production and construction by 6.5 per cent and services, 7.05 per cent.

The consumer price index (CPI) in the first half of the year increased by 8.75 per cent over the same period last year, the lowest increase in the last six years, Thuy noted.

Dam Bich Thuy, chief executive officer of ANZ Viet Nam, said interest rates would tend to fall in the coming months due to a decrease in inflation.

There was likely to be some pressure on the dong-dollar exchange rate at the year-end, but it would not be serious, many speakers said at the conference. The Vietnamese dong was expected to stand at around VND19,000-19,200 against the dollar by the end of this year.

The CPI for the whole year was forecast to increase by 7.2-7.5 per cent, Thuy said.

Rising costs

Prices of raw materials and energy in the first half of the year rose slightly and could be stable or fall a bit in the later half since the recovery of the world economy had not been stable, Thuy added.

Thuy also cautioned against too much optimism, saying several challenges were still to come.

Many economies in the world have encountered public debt crises, forcing them to cut expenses and curtail or halt economic stimulus packages, lowering global economic growth since demand for imports from EU, the US and Japan would decrease, he said.

In addition, the appreciation of the Chinese currency yuan could increase the cost of products imported from China, raising input costs because local enterprises still import a large amount of raw materials for their production.

Natural disasters, epidemics and power shortages would continue to hit economic growth, Thuy said.

Lending rates were still high and many small and medium sized-enterprises were not able to access loans to invest in their production, he said, noting that investments by the private sector rose only 9 per cent compared to the same period last year.

To achieve the targeted economic growth, it was essential to tackle monetary policy issues and ensure liquidity in the banking system and the economy, many delegates agreed at the conference.

Vo Tri Thanh, deputy head of the Central Institute for Economic Management, said: "We should do more to create confidence and trust in our financial market for investors." — VNS

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