The economy is clearly recovering: Government report

VietNamNet Bridge - Inflation is under control, export revenue is up, the trade balance is going from deficit to surplus and many other goals set for 2014  have been achieved, convincing the Government that a recovery is clearly underway.

NA session, government report, social-economic situation

Deputy PM Nguyen Xuan Phuc at the opening session.

The government report on the results of socio-economic tasks in 2013 was presented by Deputy Prime Minister Nguyen Xuan Phuc at the opening session of the National Assembly on Monday morning. It disclosed that economic growth was approximately 5.42% for the year, nearly reaching the target that had been set for 2013. The consumer price index (CPI) rose 6.04%, its lowest in 10 years. Export revenue increased, bringing the trade balance into the black from its earlier deficit, and credit growth reached 12.5% . These figures are all an improvement over those in the previous report submitted by the government to the NA.

In addition, by the end of 2013, public debt was equivalent to 53.4% of the GDP, government debt was 41.5% and the foreign debt was 37.2 %, within the generally accepted limits to ensure national financial security. Total investment in social development was equivalent to 30.4% of GDP.

According to officials, the above results show that some socioeconomic indicators for 2013 are rosier than the government’s predictions had been, a further indication of a trend of economic recovery.

Regarding the economy in January-April, Deputy PM Phuc said GDP of the first quarter rose 4.96%, higher than the same period of 2012 and 2013. The fields of agriculture, forestry and fisheries, industry and construction, and services had higher growth rates than the same period of last year. The CPI in April increased 0.88% compared to that of December 2013,  the lowest four month increase in 4 years. For this period, Vietnam’s trade surplus was estimated at $684 million.

The NA Economic Committee said that thanks to the trade surplus and an increase in overseas remittances, the country’s foreign exchange reserve has increased and the foreign exchange market is stable.

However, both the Government and the NA Economic Committee acknowledged that the trend of macroeconomic stability of the economy is not really solid, credit growth is low and dealing with bad debt is slow. The NA Economic Committee Head, Mr. Nguyen Van Giau, added that total domestic demand is weak, the number of businesses going bankrupt and being dissolved continues to increase, bad debts are still a big problem and agricultural growth is in decline.

Stabilizing inflation and the trade surplus for the second consecutive year are considered to be the major factors contributing to macroeconomic stability in 2013. Nevertheless, the NA Economic Committee noted that export turnover growth was primarily from the FDI sector and that Vietnam’s imports  of raw materials was still huge, showing the country’s dependence on foreign supply markets.

Some experts worried that the issuance of government bonds mainly through commercial banks will significantly affect the flow of credit into industry and business, adversely affecting interest rates and borrowing costs for businesses.

Na Son

NA session, government report, social-economic situation