At the regular press conference of the Government of Vietnam in October, Minister and Chairman of Government Office Vu Duc Dam shared information about important economic issues like raising overspending limit and tightening noncore business investment.
Minister Vu Duc Dam said many important economic indicators still stayed in safety limit. Specifically, the consumer price index (CPI) rose 0.9 percent in October, 5.14 percent in the first 10 months and was forecast to climb 7 percent this year. CPI gained 5.13 percent in the January – October period of 2012 and 6.81 percent in the whole year. If Vietnam further tightened macroeconomic stability measures, the target of 7 percent CPI growth is likely within reach. However, Minister Dam noted that price surge may occur towards the traditional Lunar New Year, the biggest public holiday in Vietnam.
The index of industrial production in October was higher than that in September but lower than the same month of 2012. Specifically, the index rose 5.4 percent in October, lower than 5.8 percent a year earlier. However, positively, manufacturing indicator is on the sharp rise. The economy is recovering at a slow pace, according to experts. To achieve the objectives, the entire economy must fuel up effort from now till the end of the year, especially sensitive areas.
Raising overspending limit
Given economic difficulties, especially growing pressures in the last months of the year, the Government’s proposals for higher deficit ceiling and bond issue have caught much public attention. With respect to these issues, many experts have expressed their concerns over the fulfilment of economic stability targets and the potential return of inflation. Minister Dam explained Vietnam has a strong force of expert specialists and scientists who are dedicated to the health of economy. Each of them has different views, visions and approaches. The Government, like other executive bodies, always seek expert opinions before considering any economic development plans. Therefore, the solutions and measures introduced by the government are possibly the best.
The raising of overspending limit from 4.8 to 5.3 percent was based on the computation of the Ministry of Finance as the ministry thought that budget income collection would hardly meet this year’s target because economic slowdown was denting revenues and profits of all economic sectors. The ministry said the budget deficit was estimated at VND63 trillion while State budget-funded investment was projected at VND185 trillion in 2013. The overspending limit raised from 4.8 percent to 5.3 percent, equivalent to VND18.5 trillion, is aimed to boost development investment in the context of short incomes, not to offset the overspending of VND63 trillion.
Tightening noncore business investment
Minister Dam said that the Government is resolute to restructure State-owned enterprises (SOEs). According to restructuring schemes, SOEs will only focus on essential fields, including the fields that relate to national defence and security and the fields that other economic sectors are unable to do. Except for these particular fields, investments in ‘sensitive’ fields like real estate and securities must be divested. The divestment will be based on market principles.
The Vietnam Posts and Telecommunications Group (VNPT) is a typical example which draws much public attention. VNPT Group – affiliated to the Ministry of Information and Communications – will drop either VinaPhone or MobiFone and keep only one carrier to comply with the Law on Competition and boost the healthy development of the telecom market and the economy as a whole.
Anh Phuong
Đăng ký: VietNam News