Prime Minister Nguyen Tan Dung: Falling oil prices bring more benefits than harm

On January 30, at the Government Headquarters, under the chairmanship of Prime Minister Nguyen Tan Dung, the Government held its regular meeting for January 2015, listening to and discussing the Report on the socio-economic situation in January 2015 and the implementation of Resolution No. 01/NQ-CP of the Government.

Speaking at the opening session, Prime Minister Nguyen Tan Dung assessed that the results of the implementation of tasks in January 2015 showed that most areas achieved positive results.

However, a new problem has emerged: the world oil price has dropped sharply; we have forecasted, reported to the National Assembly and in the budget balance calculation; the crude oil price was calculated to be 100 USD/barrel, but by January 29, 2015 it was only 44.41 USD/barrel.

Prime Minister Nguyen Tan Dung: Oil prices do not only follow the market, not simply supply and demand, but are also related to many other issues, so it is very difficult to forecast.

“In general, oil price developments are very unpredictable, because oil prices do not only follow the market, not only supply and demand but also relate to many other issues, so it is very difficult to forecast,” the Prime Minister assessed.

Prime Minister Nguyen Tan Dung said that, given the above situation, the Government has determined that the drop in oil prices could affect the crude oil exploitation plan of the Vietnam National Oil and Gas Group.

However, based on careful calculations, crude oil production will not decrease compared to the plan, but with the current trend of falling oil prices, production may also decrease by 1.2 million tons.

“Thus, according to calculations, GDP will decrease by 0.2%, and at the same time affect budget revenue; scenarios of 60 USD/barrel, 50 USD/barrel, 40 USD/barrel all have an impact on budget revenue.

However, according to the Ministry of Finance's calculations, oil prices have decreased, CPI has decreased, but according to the market mechanism, some other goods may increase in price, so the target is still to control inflation at 5%".

Oil prices are extremely unpredictable. Illustrative photo.

Prime Minister Nguyen Tan Dung affirmed: "According to comprehensive calculations, the decrease in oil prices is more beneficial than harmful, the GDP growth target of 6.2% can still be achieved, the budget can still be balanced, and inflation can still be controlled at 5%."

Prime Minister Nguyen Tan Dung asked Government members to continue contributing ideas in proactively managing the macro economy in the face of complicated developments in oil prices.

At the same time, continue to discuss and propose solutions to strengthen macroeconomic stability; remove difficulties for production and business; continue to improve the business environment, enhance competitiveness; promote the implementation of strategic breakthroughs; restructure agriculture associated with new rural construction; restructure credit institutions as well as plans to prepare for the traditional Tet holiday, ensuring that people can celebrate the New Year safely, healthily and economically.

At the meeting, Government members listened to and discussed the Report on tax exemption policy for goods bought and sold by border residents; Draft Decree regulating the regime and policies for officials who are not old enough to be re-elected or re-appointed to positions and titles according to their terms in Party, State and socio-political organizations; Draft Resolution of the Government approving the Project to attract and create a source of officials from excellent graduates and young scientists for the period 2014-2020;

Report on the pilot project to conduct specialized inspection of food safety at district and ward levels in Hanoi and Ho Chi Minh City; report on Methadone treatment for drug addicts being managed in prisons...

According to VNA