Over the last 11 months, the country has overcome numerous difficulties to succeed in avoiding economic decline and controlling inflation to create a favourable environment for socio-economic development, the Government members agreed. However, they pointed out that the trade deficit still remains high, at US$10.42 billion or equivalent to 20.3 percent of export earnings in the reviewed period. In the meantime, the total credit balance also on the increase.

Additionally, the regulation of exchange rates and the foreign currency market is not really flexible, leading to loose monetary policy and considerable budget overspending.

At this meeting, Government members agreed upon major goals set for 2010, the final year of the country’s 2006-2010 Socio-economic Development Plan and 2001-2010 Socio-economic Development Strategy. They set a higher economic growth rate than that in 2009 in order to increase the stability of the macro-economy, improve the quality of growth, prevent the recurrence of high inflation, enhance the ability to ensure social welfare, proactively integrate into the global economy and improve the effectiveness of international economic cooperation, maintain political stability and social order, and ensure the implementation of defence and security requirements.

To this end, the Government outlined nine key groups of solutions, including speeding up improvements in the investment environment, boosting production, commerce and services, stepping up restructuring, promoting economic recovery, managing the trade deficit effectively, mobilizing and efficiently using investment resources for development, and implementing a financial and monetary policy that will strengthen the stability of the macro-economy and prevent high inflation.

At the meeting, PM Dung gave opinions on the implementation of an interest rate subsidy for bank loans in Vietnamese Dong to organizations and individuals and for loans used to purchase machinery and equipment for agricultural production and construction materials in rural areas.

The interest on mid-and long-term loans would continue to be subsidized but the types of borrowers which would qualify would be decided by the State Bank of Vietnam, the Ministry of Industry and Trade and other relevant bodies, PM Dung said.

PM Dung asked the ministries, sectors, and localities to strictly control the import of raw materials and commodities, make prompt intervention into the prices of gold, foreign currencies and stocks, and manage the prices of essential commodities, especially in the coming months before Vietnam’s traditional Lunar New Year (Tet) festival.