PM: Primary priority given to curbing inflation

Tuesday, May 6, 2008
The Vietnamese Prime Minister reiterated that his cabinet will continue to place top priority on reining in inflation in the coming months while addressing the National Assembly session in Hanoi on May 6.

Prime Minister Nguyen Tan Dung asked the law-making body to consider the Government’s request to lower the country’s GDP growth rate target of 8.5-9% to 7% for the current year.

PM Dung introduced to the law-makers the Government’s eight-solution package to curb inflation, stabilise macro-economy and ensure social welfare and sustainable development.

He emphasised the implementation of a tight and effective financial and monetary policy as the first in the package.

The PM also referred other tasks, including removing hindrances to production, services and investment attraction, accelerating exports to reduce trade deficit, intensifying management over the market and prices and fighting speculation and smuggling.

While expressing the resolve to control inflation, PM Dung admitted the Government’s shortcomings and weaknesses in managerial and executive work.

He pointed out that the Government had maintained a lax monetary policy for years, especially in 2007, thus driving general means of payments and total outstanding credits to rise high, leaving direct pressure on inflation.

Besides, the PM also pointed to the consecutive overspending rates of 5% for years while the economy has been growing bigger and bigger. “This has not been helpful to the control and slash of the State budget expenditure,” he said.

He mentioned the State’s weaknesses in managing various markets, including the stock and real estate market, and also prices and export and import activities.

Adequate attention has not yet been given to market forecasting and study work, the PM noted, noting agencies’ failure to provide the people with prompt, clear and consistent explanations on new developments arising from the market and the issuance of policies which are sensitive to them.

Reviewing the country’s socio-economic performance in 2007 and the first four months of the year, the Governmental leader said that almost all targets for 2007 were overfulfilled with an economic growth rate of 8.48 percent.

However, he noted, the unexpected developments of the world economy with high prices of crude oil, food, materials, machinery and equipment in the last months of 2007 have posed fierce challenges to the country’s economic management and negatively impacted the stability of the macro-economy.

The Government has promptly implemented a number of policies and measures to control inflation, enhance pricing management and stabilise the monetary, securities and realty markets. In addition, the Government has also helped remove difficulties for production development and promoted exports and limited trade deficit while ensuring the balance of essential goods and helping farmers, fishermen and disadvantaged people to stabilise their life and production.

PM Dung took the occasion to point out the shortcomings of the national economy such as the economic growth rate of 7.4% in the first quarter of 2008 is still lower than that of last year’s corresponding period (7.8%) and much lower than the whole year’s target of between 8.5 and 9%. The consumer price index rose 11.6% in April compared with last December and up 21.42% over April 2007.

He mentioned developments that are badly affecting the people’s life including inflation, price hike and trade deficit together with complex monetary, securities and real estate markets. (VNA)