Monday, November 30 2020


Budget deficit, bad loans threaten economy

Update: January, 09/2016 - 10:02

Ta Dinh Xuyen, deputy director of the National Centre for Socio-economic Information and Forecast, spoke to newspaper Nong thon Ngay nay (Countryside Today) about the forecast for Viet Nam's economy in 2016.

In your opinion, what were the successes and failures of Viet Nam's economy in 2015?

I should say, the year 2015 was a tough year for our economy. We faced many difficulties and challenges in the cause of national economic development. But thanks to in-time response measures adopted by the government, we were able to utilise advantages and opportunities presented to us to develop.

In early 2015, we set the national economic growth rate of 6.2 per cent for the year. But the Ministry of Planning and Investment announced that in the first quarter our growth rate was 6.03 per cent. Quite many people were surprised at such a big achievement. However, many people expressed their anxiety about the sustainability of the national economic development when the import ratio remained high while the interest rate was still hanging in the balance. Many people blamed the government's strict policy on monetary and financial management had impeded enterprises' operation.

In addition, the high overspending of the state budget coupled with heavy public debts and bad debts have presented big challenges to the year 2015 and 2016.

The year 2015 witnessed quite many important trade agreements signed between Viet Nam and other countries in the region and internationally. Do you envisage any negative impacts from these agreements on Viet Nam's course of international integration and economic development in 2016?

In 2015, we signed 15 trade agreements, both bilateral and multi-lateral agreements, of which 10 are Free Trade Agreements while the other five are in the process of negotiation.

This is eloquent proof indicating that Viet Nam's economy is in the process of deep integration internationally.

I'm confident that in the year 2016, Viet Nam's macroeconomy will continue to develop sustainably and its inflation rate will be under control at a lower level.

I should say that the signing of many FTAs has sped up the recovery of our industrial production, particularly by Vietnamese enterprises.

Last but not least, the people's purchasing power and the growth of consumption; the increase in investment from Vietnamese enterprises and foreign direct investment enterprises have become a strong motivation for our national economic development in 2016.

However, what I have mentioned above, coupled by the on-going structural and administrative reform will serve as an impetus for us to advance forward. Though our business environment has moved ahead, there remain some weaknesses, including legal and administrative implementation, particularly policies to support Vietnamese enterprises to grow sustainably.

Many economic experts have talked about "integration traps" that are lying ahead. How do you respond to their comments?

The first challenge I want to mention is that it's getting increasingly difficult to take advantage of the opportunities brought by integration.

Our husbandry industry is an example. Its production is fragmented with high cost and low productivity. In addition, the industry is now facing a very serious problem of food safety requirements, environmental hygiene and others.

That's not all! Vietnamese enterprises have faced tough competition from their foreign peers. Pressure from international integration is already at the door step of all Vietnamese families. Many foreign products, like imported chicken and beef are sold in our super markets. They are competing with Vietnamese products of the same kinds.

In the near future, when the Trans-Paciffic Partnership Treaty comes into force, I'm afraid to say, even our vegetables will also face the same problems as meats. It is not easy for our vegetables to compete with those from Peru or Chile if we cannot ensure that our vegetables are free from contamination.

These are big challenges we have to overcome, if we want to maintain our share of the international markets. Of course, it needs strong leadership and good management from the government and the awareness of each enterprise and businessperson. — VNS

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