Economic growth to briskly roll into 2011

The nation’s industrial engine is driving the economy forward

Prime Minister Nguyen Tan Dung last week asked government authorities and state-owned companies to ensure gross domestic product growth at 7-7.5 per cent year-on-year in 2011.

The direction comes as the government prepares its economic development plan for 2011 that will be presented to National Assembly late this year for approval.

“The major targets in 2011 will be to try our best to push production, get economic growth momentum back, stabilise the macroeconomy and ensure social welfare and sustainable development,” Dung said.

He added that the economic development plan should focus on the completion of socialism-oriented market economy institution, training skilled workers and improving infrastructure systems.

Economic growth this year is expected at over 6.5 per cent, in comparison with 5.32 per cent last year. A Ministry of Planning and Investment (MPI) report released late last month predicted the growth could be 7 per cent this year, based on the strong recovery over the past five months.

The General Statistics Office reported that industrial value in May grew 13.8 per cent year-on-year, three times higher than the same period of last year. Meanwhile, export turnover increased 12.6 per cent year-on-year and trade deficit kept on a downward trend.

“The ongoing recovery since the second quarter last year indicates that we are on the right track and the economy can expand up 7 per cent next year,” said Ha Xuan Tu, deputy director of the MPI’s Department of National Economic Issues.

Previously, the British investment bank Barclays Capital forecasted Vietnam economy would grow around 7.5 per cent in 2011. Among measures to boost economic growth, Dung said the government had to pursue proper monetary policies and streamline administrative procedures to help enterprises overcome difficulties while enhancing efficiency at public investment projects.

One of the big difficulties that enterprises are facing is high lending interest rates. At present, the average annual lending interest rate at commercial banks is around 14 per cent, per year. At the monthly cabinet meeting early this month, the government also asked the State Bank to apply measures to lower lending interest rates in the market.

Dung said besides extending investment to push economic growth, the government would continue encouraging all economic sectors to invest into business and production projects as well as trimming off inefficient investments.

While projecting a high economic growth next year, Dung asked government authorities to apply measures to cope with challenges like high inflation and environment pollution.

Dung said monetary policy in 2011 had to be flexibly and cautiously applied to maintain a credit growth and monetary supply at a reasonable level that would be appropriate to economic growth targets and inflation controls.

Government authorities also had to closely monitor the real estate market movements and global input material price fluctuation, he said.