In order to rein in inflation, the government has implemented a panoply of measures: applied a flexible monetary policy, tightened public spending, stimulated production, controlled imports, enhanced market management, supported social welfare and increased communications. These solutions have paid off so far. The consumer, stock and property markets have picked up, especially in the second quarter of this year. The industrial and agro-forestry and fisheries sectors have overcome stagnation and decline and achieved positive growth. Vietnam has also reaped a bumper rice harvest from the winter-spring crop, yielding more than 18.6 million tonnes.
Despite the economic slowdown, 42,000 more businesses have been licensed in the past six months and more than 90 percent of businesses have resumed production. Total retail and service revenues fetched VND547,000 billion, a year-on-year increase of 20 percent. The consumer price index in June also increased slightly against May. The government’s social welfare policies for low-income earners and policies to offer subsidised loans, exempt or reduce taxes and stimulate consumer spending have begun to take effect.
While many big economies saw negative GDP growth, Vietnam has secured a positive growth rate of 3.9 percent. Though the figure is lower than expected, it is rather impressive given the impact of the global crisis.
Deputy Prime Minister Nguyen Sinh Hung assured the National Assembly at its May session that the national economy had overcome the toughest times. The achievement is attributed to Vietnam’s efforts to maintain socio-political stability, as well as the Party and the government’s timely introduction of on-target solutions to curb inflation and put the breaks on the economic slowdown. Additionally, many businesses and localities have worked out their own solutions and made use of opportunities to maintain production, creating a foundation for further development.
However, there is no room for complacency. Vietnam has just integrated into the world economy and luckily it has not yet been sucked under by the financial crisis and economic recession. However, it has been seriously affected and is also facing the risk of inflation returning.
To meet the target set for the whole year, in the coming 6 months, Vietnam should make a greater effort to reverse the economic downturn, achieve reasonable growth, maintain macro-economic stability, prevent the possible return of high inflation and ensure social welfare. It aims to achieve GDP and export growth rates of around 5 and 3 percent respectively, while keeping the consumer price index at below 10 percent and deficit spending at less than 7 percent of the GDP.
Fulfilling the socio-economic development tasks for the whole of 2009 will be an important factor behind the successful implementation of the five-year development plan for 2005-2010. This requires sectors and localities to be highly vigilant and diligently implement the government’s adopted solutions to maintain upward growth in the long run. The crux of the matter is that the government’s stimulus packages should be quickly put into action to stimulate economic efficiency. The disbursement of capital should be tightly monitored to ensure it will be allocated to the right businesses.
It’s believed that the national economy will quickly rebound from the slowdown and develop steadily if the administration keeps a close watch on any market fluctuations, makes accurate forecasts and adjusts policies in a timely manner, as well as properly pooling resources from all economic sectors and the entire society.
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