Ensuring macro-economic stability is still an urgent task for Viet Nam

Deputy Director of the Central Institute for Economic Management Vo Tri Thanh spoke with Vietnam News Agency about the challenges the Government faces in ensuring continued economic growth.

What are your comments on the social economic situation in the first nine months of this year?

The social economic situation in the last nine months was as predicted by economists.

Generally speaking, the economy still faces difficulties, especially in production and business. The export speed was slow despite increased value. Total outstanding debt increased compared to the end of last year but at a slow rate of 2.35 per cent, although some other figures, including GDP, industrial production and storage, were higher than before.

As a result, despite a brighter GDP growth quarter by quarter, GDP in the last nine months was just 4.73 per cent. As so, GDP for the whole year is predicted to reach 5-5.2 per cent.

However, rapid increases in other economic figures such as international balance of payments, surplus and foreign currency reserves together with the rapid decrease of inflation are good signals for the economy.

What factors have had the strongest impact on economic development?

The finance and banking system has the strongest impact on the economy. While the weakness of some banks remains unsolved, tackling bad debt is a much more pressing issue.

The rapid decrease of budget revenue has affected the need for financing economic development. Inflation for this year was predicted at 7.5-8.5 per cent, but I think it might be higher.

An inappropriate adjustment of macro-economic policy can also make inflation rise.

In summary, despite some highlights, the economy in general is still facing difficulties. This is not only the story for the last three months of the year, but also the story for the whole of 2013.

What measures are needed to reach the 5 per cent economic growth target?

We need to concentrate on short-term issues and change economic development in Viet Nam.

In the past, we lacked determination and flexibility in economic activities, so we need to make stabilising the economy a key target besides implementing policies and measures to support enterprises, especially those relating to the macro-economy.

Taking action against weak banks or re-structuring the banking system will help the banking system as a whole to stay healthy. It must be an effective financial intermediary so that people move from saving to investing, creating GDP.

Does it mean that stabilising the macro-economy is the key target for this year?

It's not only this year's story but also next year's. We need to solve fluctuations in the economy. We should assign human resources effectively and distribute output products fairly.

Policies need to be cautious and flexible.

We also need to adjust policies to cope with the unstable global economy.

Do you think we need to set a higher growth target for 2013?

There have already been some predictions for Viet Nam's economy next year. One of the scenarios says that the world economy in 2013 will still be difficult but there is optimism for development. As a result, some experts say that Viet Nam's economy next year can reach a higher level. If we can achieve growth of 5-5.2 per cent in 2012, we can look for a growth rate of 5.5 per cent next year. — VNS