Inflation control - The brightest spot in the past 5 months

In the first 5 months of the year, inflation control has achieved better results than expected: CPI in May increased by only 0.2%; in May compared to December 2013, CPI increased by only 1.08% - the lowest compared to the same period since 2002.

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First of all, let's talk about inflation control in the first 5 months of the year. Inflation control has achieved better results than expected. CPI in May increased by only 0.2%; in May compared to December 2013, CPI increased by only 1.08% - the lowest compared to the same period since 2002. The average increase in the first 4 months of this year compared to the same period last year increased by 4.72% - lower than many previous months.

Low inflation has a huge impact on the socio-economy. It brings joy to consumers; peace of mind to investors, producers and businesses; creates conditions for policy makers and macro managers to feel more confident in proposing and implementing solutions to remove difficulties for production and support the market. The results of the first 5 months are a positive signal that the CPI for the whole year will increase lower than the planned target (7%), possibly even lower than the previous 2 years (increased by 6.81% in 2012, increased by 6.04% in 2013), or even only at the level of 5-6% as the regular Government meeting in April suggested.

On macroeconomic stability. Macroeconomics is reflected in many indicators, of which two main groups are the international balance of payments and the balance of state budget revenues and expenditures.

The international balance of payments includes many contents, including the trade balance (export and import of goods), foreign investment, international visitors' spending, etc.

Exports have some new points. Due to some months of export reaching over 12 billion USD, the total turnover in 5 months has reached 58.51 billion USD, higher than the whole year of 2009 (57.1 billion USD).

The domestic economic sector's exports used to decrease or increase slightly, but now they have increased quite high (11.9%), proving that this sector has made efforts to rise up to take advantage of the opportunity to open up and integrate more deeply.

Agricultural, forestry and fishery exports reached 12.12 billion USD, accounting for 20.7% of total export turnover, a significant increase over the same period last year.

Some key economic indicators in the first 5 months of 2014 compared to the same period in 2013 (%). Data source: General Statistics Office

Similarly, after only 5 months, there have been 12 products and 12 markets reaching a turnover of 1 billion USD or more. Many main products have a higher growth rate than the general rate, in which, some products have both reached a large scale and increased quite high, such as phones; textiles; footwear; seafood; coffee; pepper; handbags, wallets, suitcases, hats, umbrellas; wood and wood products, etc.

Because exports increased more than imports (15.4% compared to 9.6%), the trade surplus in the first 5 months was 1.649 billion USD. The results of the first 5 months are a positive signal for the whole year to exceed the plan in terms of export turnover growth rate (10%), not only not having a large trade deficit as planned (over 8.7 billion USD) but also possibly having a trade surplus with a larger trade surplus than the previous 2 years.

The 5-month figures also show that the amount of foreign currency entering Vietnam has achieved good results. The realized foreign direct investment reached 4 billion USD. The disbursed official development assistance capital increased. The number of international visitors to Vietnam in 5 months reached 3.75 million, an increase of 26.1% - a very high growth rate and achieved in all 4 purposes of visit (tourism, work, visiting relatives and other purposes). This is a positive signal for tourism to reach a new record in both the number of visitors and revenue compared to 2013.

Due to the international balance of payments achieving a fairly large surplus, the State Bank has been able to purchase and increase foreign exchange reserves to 35 billion USD - the highest ever, ensuring the financial security and liquidity of the country.

Regarding budget balance, if the previous two years encountered great difficulties, this year the pressure has been much reduced. The implementation rate from the beginning of the year to May 15 this year compared to the annual estimate of total revenue is higher than that of total expenditure (reaching 41.7% compared to 36.8%), in which domestic revenue reached 421.1%, from crude oil reached 49.9%, higher than the general implementation rate. The growth rate compared to the same period last year of total revenue is higher than that of total expenditure, in which domestic revenue and balance revenue from import and export increased even higher. Therefore, the implementation rate of deficit compared to the annual estimate is lower than the implementation rate of total revenue and total expenditure; the deficit/GDP ratio in the first quarter was 4.9%, the whole year is likely to be lower than the 5.3% rate according to the annual estimate.

Regarding economic growth, GDP growth since 2013 has shown signs of bottoming out with an increase rate of 5.42% compared to the previous year (in 2012 it increased by 5.25%, the lowest level since 2000); in the first quarter of 2014, that sign continued to occur at a higher rate than the same period two years ago.

The industrial production index (IIP) in May increased by 5.9%, bringing the 5-month IIP up to 5.6%, higher than the 5.5% growth rate of the 4 months, in which the processing and manufacturing industry - the industry with the largest proportion in the entire industry - increased by 7.5%.

Some input and output factors showed signs of improvement. The amount of investment capital from the State budget in May was higher than previous months (May reached 16.8 trillion VND; April was nearly 15.54 trillion VND; March was 13.6 trillion VND).

Implementation of FDI and ODA capital sources continued to increase. Credit growth was better than previous months. The growth rate of total retail sales of goods and consumer service revenue, excluding price increases, increased by 6% in 5 months... Moreover, it has almost become a tradition that our country's economic growth in the last quarters of the year is often higher than in the first quarters of the year.

However, in the first 5 months of the year, there are still some limitations and shortcomings. That is, investment capital/GDP reached the lowest level in over 20 years, while investment capital is a direct material factor determining economic growth. Investment capital from the State budget in 5 months still decreased (in which the local decrease was greater). Total retail sales of goods and consumer service revenue still increased slowly....

One point to note is related to the complicated developments from the beginning of May until now, which requires businesses to research and evaluate in order to proactively choose and expand investment and import-export markets with partners in the direction of diversification, multilateralization... appropriately.

According to chinhphu.vn