Government regular meeting September 2012

Government members assessed that the socio-economic situation in September and the first 9 months of 2012 continued to have positive changes in the right direction; the goal of curbing inflation and stabilizing the macro-economy achieved initial results; social security was ensured and growth was maintained at a reasonable level.

Prime Minister Nguyen Tan Dung, Deputy Prime Ministers: Nguyen Xuan Phuc,
Hoang Trung Hai, Nguyen Thien Nhan, Vu Van Ninh at the meeting.
Photo: VGP/Nhat Bac

GDP growth in the third quarter of 2012 reached 5.35%, a great effort

On September 27, the Government held its regular September meeting chaired by Prime Minister Nguyen Tan Dung.

Discussing the economic and social situation, Government members assessed: Regarding the implementation of the growth target, the GDP growth rate in the third quarter of 2012 is estimated at 5.35%, lower than the same period last year, but this increase is a great effort in the context of having to focus on the target of controlling inflation and stabilizing the macro economy. The GDP growth rate in the first 9 months of the year tends to improve after each quarter, each quarter is higher than the previous quarter (GDP in the first quarter increased by 4%, in the second quarter increased by 4.66%, and in the third quarter is estimated to increase by 5.35%). Overall, GDP in the first 9 months of the year is estimated at 4.73%.

Monetary and credit policies are managed tightly and flexibly, combined harmoniously with fiscal policies, contributing to curbing inflation and stabilizing the macro-economy.
Lending interest rates have decreased rapidly with a total reduction of 5-8%/year, in line with developments in inflation, the macro economy and the money market. Credit structure continues to shift in a positive direction, focusing on priority sectors; gradually reducing the proportion of outstanding loans for discouraged sectors.

In the first 9 months of 2012, total export turnover increased by 18.9% compared to the same period last year; total import turnover increased by 6.6% compared to the same period last year. The trade surplus in the first 9 months of the year was equal to 0.04% of total export turnover. Thus, exports continued to maintain growth momentum while imports decreased sharply and there was a trade surplus in the first 9 months of the year.

This is an encouraging result in the context of many difficulties in the world and domestic economy, with reduced import demand in many markets. The sharp reduction in import growth rate and trade surplus also contributed to foreign currency balance, exchange rate stability and increased foreign currency reserves of the State.

Thanks to the strong implementation of measures to remove difficulties and support production and business development, industrial production has had positive changes month by month, with inventories gradually decreasing. The industrial production index (IIP) in the first 9 months of 2012 increased by about 4.8% compared to the same period in 2011. Agricultural, forestry and fishery production continued to develop quite stably. The total production value of the industry in the first 9 months is estimated to increase by 3.7%.

In addition, all levels and sectors have continued to actively deploy and effectively implement social security policies. Regarding labor and employment, in the first 9 months of 2012, the country created jobs for about 1,130 thousand workers, reaching over 70.6% of the annual plan, of which about 60 thousand workers were exported, reaching 66.7% of the annual plan.

However, Government members also said that the macro-economic situation still faces many difficulties and challenges, notably the fact that the macro-economy is not really stable, the consumer price index is on the rise again, economic growth is slower than expected; bad debt in banks is slow to be resolved; the financial and monetary markets are still complicated; production and business recover slowly...

Overview of the regular Government meeting in September 2012. Photo: VGP/Nhat Bac

Prioritize curbing inflation and stabilizing the macro economy

Analyzing and forecasting the world and domestic economic situation, many members of the Government believe that the world economic situation is still complicated and contains many risks. In the country, the consumer price index growth rate in the last months of the year may be higher than in the beginning of the year due to the impact of the world and domestic economic situation.

Based on the above assessment, Minister of Industry and Trade Vu Huy Hoang, Government Inspector General Huynh Phong Tranh and a number of other Government members expressed the view that it is necessary to continue to proactively manage inflation control, prioritize the implementation of solutions to control inflation, and maintain macroeconomic stability.

Focus on thoroughly handling bad debts in the commercial banking system. Pay close attention to developments in the financial and monetary markets to take timely and appropriate measures to ensure liquidity for credit institutions and ensure safety for the entire banking system.

Regarding the issue of medical service prices and fees, many Government members proposed: for localities that have not announced new medical service prices and fees, it is recommended to consider postponing the application period, carefully calculating the roadmap and timing of price increases, in order to both reduce the burden on people and contribute to the goal of controlling inflation.

Pointing out that production and business still face many difficulties, Deputy Prime Minister Nguyen Xuan Phuc and Deputy Prime Minister Hoang Trung Hai emphasized the need to improve the quality of trade and investment promotion activities; seek and expand markets, boost production and export, especially products made from domestic raw materials; and effectively implement measures to maintain high growth of key export products.

Continue to remove difficulties, create favorable conditions to encourage production in advantageous fields and products; improve production and business efficiency, increase the competitiveness of goods and services. At the same time, pay attention to agriculture and rural areas, consider methods to support the purchase of agricultural and aquatic products to ensure the interests of producers.

Regarding the issue of prices, Deputy Prime Minister Vu Van Ninh stated that adjusting the prices of some goods and services according to market mechanisms is necessary, but before adjusting, it is necessary to carefully consider the timing and anticipate the economic and social impacts after the adjustment.

In addition, some Government members proposed paying close attention to strengthening market management, strictly and promptly handling acts of speculation and hoarding that cause virtual price fever; controlling the quality of imported goods in conjunction with fighting against goods fraud, counterfeit goods, and poor quality goods in the last months of the year, especially during the upcoming Lunar New Year.

In his concluding remarks at the meeting, Prime Minister Nguyen Tan Dung stressed that, in addition to the achieved results, the socio-economic situation still has shortcomings and limitations, including that although there is growth, it is still slow, the macro-economy is not really stable, and inventories are still large. Therefore, the remaining tasks in the last months of the year are extremely heavy, due to the slowing down of world economic growth and continued complex and unpredictable developments, in addition to the internal difficulties of the economy.

From the above analysis and comments, Prime Minister Nguyen Tan Dung suggested that ministries and functional branches need to strengthen forecasting work to propose effective socio-economic development policies and solutions suitable to the actual situation.

Along with that, it is necessary to continue to resolutely, synchronously and effectively implement the tasks set out at the beginning of the year; strive to achieve the highest results in the socio-economic development goals set for 2012. First of all, it is necessary to focus on strictly controlling prices, achieving the goal of not letting inflation reach double digits; controlling inflation not only for this year but also for the following years.

In controlling inflation, Prime Minister Nguyen Tan Dung requested to boost credit growth; strictly control total means of payment; maintain exchange rate stability; strictly control interest rates, not allowing interest rates to rise further.

The Prime Minister emphasized that with synchronous and drastic solutions, it is necessary to achieve the goal of curbing inflation and maintaining macroeconomic stability. This goal must be achieved not only for 2012 but also for the following years, for the sustainable development of the country.

Regarding the fiscal side, in difficult circumstances, we must try to balance revenue and expenditure, keeping the deficit at 4.8%. In revenue and expenditure, we will only advance the state budget for 2013 by 30 trillion VND as approved.

Ensure the balance between supply and demand of goods, avoid shortages and price hikes. Balancing and ensuring goods for the last months of the year, especially food, must be calculated right now. Balancing goods must go hand in hand with price stabilization, control and management.

Continue to implement the policy of regulating commodity prices according to market prices, but it must be done in a roadmap, not in a rush, and must carefully calculate the economic and social impacts after price adjustment.

To achieve the growth target of over 5% in 2012, Prime Minister Nguyen Tan Dung requested that it is necessary to continue to pay attention to removing difficulties for production and business; promote production and export of advantageous products such as rice, seafood, textiles, footwear; pay attention to developing advantageous services such as tourism, finance, banking, telecommunications, aviation; focus on solving inventory, especially construction materials; and remove difficulties for the real estate market.

Promote and restructure the economy, including restructuring public investment, restructuring state-owned enterprises and restructuring banks. In restructuring state-owned enterprises, we must first focus on restructuring corporations and general companies, rearranging their scale to suit the market and financial capacity; focusing on key industries. In restructuring banks, we must first focus on resolving bad debts associated with handling weak commercial banks.

Referring to the issue of social security, Prime Minister Nguyen Tan Dung especially reminded ministries, branches and localities to ensure good implementation of the work of creating jobs for workers, reducing poverty, and ensuring financial resources for poor students to borrow money to go to school.

At this meeting, the Government also listened to reports and discussed the report on value-added tax solutions according to Resolution No. 37/NQ-CP; the draft Law on Public Investment; the draft Ordinance amending and supplementing a number of articles of the Ordinance on the State honorary title "Heroic Vietnamese Mother".

According to (Chinhphu.vn)-LT