Vietnam will surely overcome difficulties: Deputy PM

VietNamNet Bridge – Inflation, reducing public spending and public investment are burning issues at the midterm Consultative Group Meeting (CG) in Sapa, Lao Cai province today.

Minister of Planning and Investment Vo Hong Phuc said Vietnam’s GDP growth rate in the first quarter of 2008 was 7.4%, which is still considered “high”, but is lower than the same period of last year. Notably, the inflation rate rose to 15.96% and is forecast to reach over 21% for the whole year.

Phuc said that the trade deficit in the first five months of the year surged to 61.6% compared to 17.9% of the corresponding period of 2007. The super-high trade deficit is a primary reason for the payment imbalance and unstable foreign exchange rates.

According to the official, one of the ways to realise sustainable development targets is re-arranging capital investments sourced from the state budget, government bonds, state investment credit and state-owned enterprises’ investment.

The Minister said the government has cut VND14 trillion of investment from the planned VND135 trillion.

“The government is considering transferring some state-funded projects into build-operate-transfer (BOT) projects, which would be invested in by domestic and foreign businesses, or transferring lucrative projects to private companies,” Phuc said.

He said without hard solutions, Vietnam would fail to reach its goal to reduce the poverty rate to 11 or 12% this year.

Phuc admitted that one of reasons for the economic slowdown is Vietnam’s loose monetary policy, which has been applied for many years. In addition, public spending has not been economical.

Deputy Prime Minister Truong Vinh Trong said: “Vietnam has to face great difficulties and challenges, which directly affect the lives of Vietnamese people, particularly the poor.”

Trong confirmed that Vietnam will pursue the eight groups of solutions that the government has identified.

“Vietnam will surely overcome all difficulties and challenges to stabilise its economy and move ahead in the coming time. The Vietnamese government and people are determined and are exerting efforts to overcome difficulties and challenges.”

According to Minister Phuc, in the remaining months of 2008, the government will implement three missions: tighten the monetary policy to maintain stable credit growth; control import-export activities; and curb the trade deficit.

Vietnam will also assist poor people in remote and isolated areas as well as workers in industrial zones, who suffer the biggest impacts of economic stagnation and price increases, Phuc emphasised.

(Xuan Linh)