2011 has been one of the most difficult years for the Vietnamese economy in the past decade however, with the Government’s efforts to manage monetary and financial policies, inflation was kept at 18.58 percent and economic growth reached nearly 6 percent.

The following is an interview given to VOV by Do Thuc, Head of the General Statistics Office (GSO) under the Ministry of Planning and Investment, on the 2012 targets for curbing inflation and promoting economic growth.

Reporter: Based on the figures for inflation and economic growth in 2011, what is your assessment of the economic situation and macroeconomic management over the past year?

Mr Thuc: In 2011, the Vietnamese economy was faced with difficulties presented by the global economic downturn, as well as natural disasters and the pressure of inflation. The Vietnamese National Assembly adjusted the economic growth target for the year to 5.8-6 percent, instead of the initial target of 7.5 percent. Growth of 5.89 percent of GDP was finally achieved, thanks to efforts by the entire political system, the business community and the public. It is worth noting that agriculture, industry, construction and services posted high growth rates. GDP growth in 2011 increased by 4 percent over the previous year’s figure, thus helping the national economy achieve the impressive growth rate of 5.89 percent.

The consumer price index (CPI) in December rose by 18.13 percent from the same month in 2010, while that for the whole year was 18.58 percent higher than the previous year. Despite the high CPI, the Government was determined to rein in inflation, tighten its monetary and financial policies, cut public investment and limit State budget spending. If we had failed to tighten the monetary and financial policies, the CPI would have increased to 25-27 percent, instead of the current 18.13 percent.

Reporter: How will the five-percent increase in the price of electricity affect the CPI next year? Is it possible to keep inflation below 10 percent in 2012?

Mr Thuc: Increasing the electricity price by 5 percent will not have a big impact on the CPI next year but it is likely to raise the CPI for the whole year by 0.3-0.4 percent.

If next year’s economic growth rate is maintained at 6-6.5 percent and outstanding credit at 15-17 percent, inflation could be possibly kept at below 10 percent.

Reporter: Is the Government's target for 6-6.5 percent GDP growth in 2012 achievable?

Mr Thuc: We must try our best to reach this goal as next year is predicted to present a lot of difficulties. To maintain economic stability, it is imperative to ensure a tightened monetary policy.

Domestic businesses are still finding themselves in a difficult position regarding credit due to high lending interest rates of 20-21 percent. Banks have recently been required to offer lending interest rates of 15-17 percent in line with the scope of the business.

If snags in business and production are ironed out, enterprises will provide the leverage to stimulate economic growth, therefore the target of 6-6.5 percent is within reach.

Reporter: Thank you very much.