Report exposes continued weaknesses in Vietnam's economy

October 11, 2012 - 03:35 PM

The MoPI released the Socio-Economic Report in 2012 which pointed out corruption as a major issue for the country's economy.

The Ministry of Planning and Investment (MPI) released the Socio-Economic Report in 2012 and plan for 2013 which pointed out corruption as a major issue for the country's economy.

The report said the in the first ten months of 2012 interest rates were reduced, foreign currency exchange remained stable and inventory was lowered. However the GDP growth continues to fall short of the target of 6% to 6.5%, at just 5.2%.

This would mark the second year in a row that Vietnam failed to meet its GDP growth goals. Last year, GDP growth was 5.89%, while the target was 7%-7.5%.

Another concern pointed out in the report was corruption and complicated bureaucracy in the business arena. It said that misuse of office in business dealings in Vietnam hinders economic development.

The MPI indicated the macro-economy has not been stable, with high inflation and a large rate of bad debt still posing problems.

For 2013, the MPI set goals for GDP growth at 5.5%, CPI at 7%-8%, export turnover at USD124.3 billion and export surplus at 8%. The goal for budget deficit is hoped to be lower than 4.8% GDP and the total investment capital would be 30% GDP.

Interest rates will be lowered in accordance with inflation so enterprises will be able to access credit.

The Government will also tighten control over the banking system to ensure the liquidity and safety. New regulations will be applied for fraud, and other violations that affect credit.

Monetary policies related to borrowing and paying foreign loans and debt restructuring will also be closely monitored to ensure a relatively low level of outstanding debts.

In order to boost the domestic economy, the MPI proposed to lower the corporation income taxes and create favourable conditions for enterprises to access capital and reduce inventory.