Housing projects in default may receive aid
Deputy Prime Minister Vu Van Ninh spoke to the media on the sideline the on-going fourth session of the 13th National Assembly about Government measures to tackle the crisis of bad debts in the real estate sector.
|Deputy Prime Minister Vu Van Ninh.
What were the bright spots in the economy in the first 10 months of the year?
It is really difficult to evaluate the domestic economy when the world economy is also on a downturn and purchasing power is low. However, Viet Nam has advantages in agricultural production, providing essential products for which the market still has demand. This year, Viet Nam has also set a goal for export growth rate of 10 per cent but the figure would possibly approach 16 per cent.
By the end of the year, growth in GDP is expected to reach over 6 per cent, and hopefully the growth rate next year will improve. Still, I don't dare to say the word "recover."
Economists are worried about current high inventories and bad debt levels. What measures are being taken to tackle these problems?
The Government is focused on settling bad debts to promote the liquidity of the banking system as well as the economy as a whole. Only when the liquidity problem has been fundamentally handled can other problems be addressed. Credit in the real estate sector is the biggest headache – and resolving it will be key to tackling many other problems, including inventory reduction.
Accelerating production would also help hasten inventory reduction, since much of the surplus inventory is raw materials for other industries.
The Government is trying to address these difficulties for enterprises with tax deferral policies. In hard times, it is unavoidable that enterprises which do not operate effectively will fall into bankruptcy or dissolution. But for many others, the difficulties are only temporary and they have the capacity to overcome them.
Currently, inventories have been reported to be decreasing quarterly, offering signs of improvement for the economy.
How is the Government addressing the credit crisis in the real estate market?
It's important to analyse thoroughly each bad debt for measures to deal with it. There are also debts which are likely to turn into bad debts, requiring timely attention. In fact, the Government has already ordered the State Bank of Viet Nam to take measures to tackle bad debts in general and in the real estate sector in particular.
If difficulties hit real estate developers in the process of completing housing projects, their projects will be completed and put into use. After that, capital can turn over, debts be repaid and business continue. That would be a possible solution. — VNS