Gov’t consults with economists on macro-economic governance

Government’s leaders at the meeting with experts to discuss key solutions for governing macro-economy, Hanoi, February 22, 2011

Determined to control inflation

Economists agreed with the Government about the need to enact specific resolution which figures out key solutions for controlling inflation, stabilising macro-economy, and ensuring social welfare for 2011.

Some economists directly contributed their comments on the draft document, particularly in the fields of monetary policy, public investment management, export encouragement, energy saving, roadmap for petrol price adjustment, and social welfare.

Many economists said that high prices of input materials and food on the international markets, regional escalating inflation, and domestic adverse weather conditions have badly affected the national economy.

The prices of some essential commodities like petrol, electricity have not been regulated by market rules, leading to huge loss, distorted market relations and standstill of direct regulating measures.

With the above factors, the government should take drastic measures to control inflation, stabilise macro-economy, and strive for highest growth rate, economists said.

They also put forward measures relating to payment balance, interest rate reduction, removal of speculation and gold smuggling, investment improvement, control over the real estate market and state-owned enterprises’ investment projects.

Some economists proposed that the government should be determined in addressing speculation of foreign currency and gold; and regulating prices of petrol and electricity on the basis of market rules.

Lowering credit growth down to 20 per cent, reduce public spending by 10 per cent

PM Nguyen Tan Dung, on behalf of the government, praised economists’ whole-hearted comments, which will help the Government to perfect the content of the draft resolution for quick response to the current situation.

The government chief pointed out that the resolution must reflect the government’s target of inflation curbing, macro-economic stabilisation, social welfare guarantee for 2011, of which inflation curbing is the first priority.

The State Bank of Vietnam was asked to have a tightened and cautious monetary policy to keep credit growth rate less than 20 per cent this year.

The government will mobilise all resources to ensure adequacy of foreign currency for the economy’s import demand while tightening management over foreign currency and gold trading, PM Dung stressed,

The government chief also asked for a tightened fiscal policy and reduce public spending by 10 per cent.

Ministries and sectors were required to review and cut down their public investment projects, then report to the government right in March.

PM Dung called for production acceleration, particularly agricultural production, and trade deficit control.

Besides, he stressed the priority of synchronous implementation of social welfare policies, particularly for poor people.