Vietnam’s GDP growth rate is estimated to have grown 7.4 per cent in the first quarter this year, lower than 7.7 per cent of Q1 last year due to higher oil prices, natural disasters, an economic slowdown in the world and depreciation of the U.S. dollar, the government of Vietnam said on its web site Wednesday.
Prime Minister Nguyen Tan Dung highlighted at the regular meeting that the government will give priority to controlling inflation to stabilize the macroeconomy and will have to adjust the economic growth targets.
The global economic slowdown is directly hurting Vietnam, the WTO membership, which imports more than 80 per cent of in put materials and machinery [total value of imports and exports exceeds 1.7 times of its GDP] and it is based on foreign investment sources, which account for 35 per cent of its total investment.
Consumer prices in March are estimated to have soared 2.99 per cent on month and 9.19 per cent compared with Dec, and trade deficit widened to US$7.39 billion between January and March.
However, government officials noted the growth of CPI in Mar was lower than 3.56 per cent in Feb, meaning inflation will be under control soon.
Natural disasters including longest-ever cold snap had dealt a heavy blow to the agricultural production and the entire economy, the government said.
Meanwhile, the government also pointed out shortcomings in macroeconomic measures, wastes and ineffectiveness in state budget-funded construction projects, land problems, weaknesses of the state apparatus, which did not meet the country’s integration requirements in its integration into the global economy.
PhD Vo Tri Thanh, head of the Central Economic Management Institute’s International Economic Integration Board noted government ministries and agencies lack coordination in controlling inflation and mainly base on the aggregate supply and demand, not on international account balance.
The economist proposed three measures: (1) completing the legal framework of the market economy, infrastructure development and training skilled human resources, (2) laying firm foundation for the financial and monetary market and government bonds market and (3) adopting measures to stabilize the current macroeconomy.
Earlier, Le Dang Doanh, a leading economist, proposed that the government of Vietnam should axe between 15 per cent and 30 per cent of the current construction projects nationwide in an effort to tame galloping inflation.
Cao Sy Kiem, a member of the Advising Central Monetary Policy Council told the local Ho Chi Minh City Law newspaper that the government of Vietnam will have no choice but to lower the economic growth targets to 8 per cent from its 8.5 per cent target to curb jumping inflation to 12 per cent this year. (Government’s Website, VNA)
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