>> Vietnam\'s efforts to cope with crisis highlighted
>> Resolution 11 to go into next year
>> Inflation control remains top priority: PM Dung
>> PM urges government to stay focused on inflation
Prime Minister Nguyen Tan Dung said that the Government would continue to pursue target of taming inflation rather than economic growth.
Vietnam to curb inflation at 18% this year
At a meeting to consult international partners on September 6, Dung emphasised that the Government considered economic expansion as just one factor in macro-economic stability.
Economic growth not prioritised
According to Dung, the Government is determined to complete the macro-economic target of curbing inflation at 18% this year. More efforts would be made in order to tame inflation to single-digits by 2012.
The country will maintain its GDP growth rate at around 6% this year and control credit growth at less than 20% during the year.
He emphasised, “The Government will prioritise curbing inflation and stabilising the macro-economy in order to better implement Resolution 11. We are not vacillating. We are not running after economic growth.”
In addition to short-term measures, the Government would hasten economic restructuring with priority given to more efficient investment, anti-inflationary measures and enhanced efficiency and transparency in public investment, Dung noted.
He called for more support from international organisations in policy consultancy and human resource development.
Unsustainable
According to the World Bank’s research in the first eight months of 2011, the country’s economy expanded by 5.4% in the first quarter of this year and by 5.7% in the second quarter.
Its export revenues soared by 33.7% in the first eight-months compared to last year amid a rise in foreign currency reserves and stable foreign exchange rate.
However, those achievements were unsustainable, said Deepak Mishra, World Bank (WB)\'s chief economist in Vietnam.
The country’s inflation rate in the first eight months was up 23% from a year earlier, which is the second highest rate since 1992. Inflation may continue to increase in the fourth quarter of this year.
Vietnam’s foreign debts as a proportion of GDP reached 42%, which is the highest level since 1998. The figure was only 8% in Indonesia and around 30% in Malaysia, the Philippines, Thailand and Cambodia.
The country’s credit risk ratio reached 400 points, the highest level since May 2009. This stands in stark contrast to regional competitors such as Indonesia, Malaysia, the Philippines and Thailand which ranked at 117 points.
The VN-Index’s value declined 14% during the period, indicating the gloomiest stock market for the past four years.
In order to improve the situation, Chief of International Monetary Fund (IMF) in Vietnam Bennedic Bingham suggested that the Government should resume the restructuring of the banking system and enterprises, including both state-owned and private firms.
The country should demonstrate its determination to continue economic restructuring.
The Government should also heighten transparency in terms of the state budget, make public full information about foreign debts held by state-owned enterprises (SOEs), and enhance business administration among SOEs.
More efforts should be made to boost transparency in the banking system and to prepare plans for a possible financial crisis, he added.
