Lawmakers worry about economic bottlenecks

They raised worries at the opening ceremony of the 18^th session of the NA Standing Committee in Hanoi on May 14.

A government report reveals the country’s first quarter economic growth rate in 2013 stood at 4.89 percent, slightly higher than 2012’s 4.75 percent first quarter, but far below the 5.53 percent and 5.84 percent of 2011’s and 2010’s first quarters.

The banking sector’s disappointing 0.03 percent credit growth and the 4.93 percent industrial production index indicate the economy’s capital absorption ability and its production capacity have both been seriously affected.

The processing and manufacturing sectors’ excess inventories continue to hamper growth.

Export earnings during January–April hit US$39.46 billion, an increase of 17.5 percent over the same period last year. But April’s exports dropped 2.1 percent from March levels, and the State economic sector’s exports tumbled 20 percent.

NA Budgetary Committee Chairman Phung Quoc Hien said if the current GDP growth remains for the rest of the year, Vietnam will find it difficult to fulfil its 5.5 percent GDP growth target.

“Domestic businesses rely on bank loans, yet large deposits show an imbalance in capital disbursement,” Hien said. “The 5 percent GDP growth depends on the banking sector achieving a credit growth rate of 14–15 percent.  The first quarter’s low credit growth is restricting the growth of the national economy more broadly.”

Monetary policy – a priority

Vice State President Nguyen Thi Doan asked the National Assembly to examine the current circumstances carefully with a view to removing or circumventing these damaging bottlenecks.

Monetary policy will be prioritised as weak capital absorption could result in business stagnation, falling budget revenue, rising unemployment, and weakened social security, said Doan.

She recommended thrift and waste minimisation as effective public investment strategies.

Phan Trung Ly, Chairman of the National Assembly’s Committee for Legal Affairs, echoed Doan’s view. He said the crux of the matter is fine-tuning monetary policy, describing it as a comprehensive solution that would help businesses access bank loans, stimulate production, and address excess inventory levels.