A helping hand to business and production

What were most positive signs in macro economic development in the first seven months of 2013?

It is obvious that macro economic indexes are bettering, particularly the inflation index. Accordingly, the consumer price index (CPI) in July 2013 hiked 2.68 per cent against December 2012 which was almost the lowest growth in the past decade (except 2012 with 2.22 per cent hike). In this context, the average seven-month CPI growth of 6.81 per cent on-year is not a big concern.

In addition, the payment balance saw a surplus, foreign currency reserves were fruitful, and banking sector’s liquidity was markedly enhanced. The birth and operation of Vietnam Asset Management Company (VAMC) and a suite of measures to tackle bad debts would entail further improvements.

Signals from the production and business sectors were also positive. Inventories in the processing and manufacturing industries were going down.

These attainments are remarkable amid current economic woes. However, a number of risks still exist, such as the aggregate demand and investment saw a sharp decline, so that reaching budget collection targets would be tough.

Besides, inflation also depends on some ‘governance’ factors like the revision of tuition and hospitalisation fees or the exchange rate.

What’s about the country’s export performance?

We have some concerns. First, though the export value was surging, the growth pace was sliding, however. The country’s total export value jumped 14.3 per cent on-year in the first seven months of 2013. This growth pace in the first six months was 16.1 per cent, in the first five months 15.1 per cent; in the first four months 16.9 per cent, in the first three months 19.7 per cent, in the first two months 23.9 per cent and the first month 43.2 per cent.

Second, export growth continues to capitalise on foreign invested sector performance. In the first seven months this sector contributed 60.4 per cent of Vietnam’s total export value, up 26.3 per cent versus 1.6 per cent growth of the domestic sector.

What should be taken as top priority in government governance in later 2013?

Further improving the macro economy would remain crucial. Initial positive signs of the macro economy are creating room for the application of more flexible policies to uphold the market and firms as well as allowing stronger execution of existing support measures set in governmental Resolution 02.

Should we mull an economic stimulus package in the current context?

No, but we may work on a programme for gradual economic rebound to bolster demand. The programme would consist of the measures to quicken ODA and counterpart capital disbursement pace and on bond issuances.

Accelerating state-owned enterprises equitising process is also a necessity, particularly profit-running businesses to supplement the capital sources earmarked for investment construction, paving the way for project completion in current context.

The core message of government policies currently should be not putting pressure on economic growth target, but resuming market trust. We could say that the trust, albeit being enhanced, still remains fragile.