Positive signs for the economy

The Government leader made the remarks at a regular cabinet meeting on September 5, which discussed the socio-economic situation in August and measures to meet targets for the remaining months of the year.

According to cabinet members, Vietnam’s socio-economic situation in August saw various positive signs of development.

The consumer price index (CPI) in August bounced back to 0.63 percent after two consecutive months of decline, bringing CPI growth in eighth months to 2.86 percent compared to 2011 and 5.04 percent to the same period last year.

Thanks to the effectiveness of the recent flexible management of monetary policy, interest rates fell 4-5 percent per year, consistent with indicators such as inflation, macroeconomic growth and monetary markets. Many commercial banks have offered favourable credit packages with low interest rates of 9-10 percent per annum.

Export earnings in August were estimated at US$9.8 billion, down 3.8 percent from July, while import revenues reached US$9.95 billion, up 3.5 percent. Trade deficit in the first eight months of this year hit around US$62 million, or 0.08 percent of export values.

Measures to help business sectors to iron out snags, as addressed in government resolution 13, has proved effective with the index of industrial production (IIP) increasing by 4.1 percent compared to the previous month and 4.4 percent against the same period last year.

Agro-forestry-fisheries production continued to enjoy stable development. Total retail sales of consumer goods and services in the first eight months rose 17.9 percent over the same period in 2011.

Meanwhile, social welfare and security was maintained with one million new jobs created over eight months. Ministries and agencies successfully implemented measures to deal with natural disasters and reduce poverty sustainably, especially in poorer districts, including assistance for rural labourers to access vocational training.

However there remained challenges facing the nation, such as low economic growth, slow progress of bad debt settlement, the complicated financial and monetary situation, high inventory levels, and the increasing closure of businesses.

Drastic measures needed in remaining months

Pointing out the shortcomings of the economy, PM Dung asked ministries and agencies to make greater efforts to reach the GDP growth of 5.2 percent and keep inflation at around 7 percent in 2012, in line with the set targets.

He stressed the need to map out plans for socio-economic growth in 2013, proposing stabilising the macroeconomy, containing inflation, reaching economic growth of 6 percent, and speeding up economic restructuring with a focus on public investment, state-owned enterprises, as well as banking and financial sectors.

It is also crucial to maintain social welfare and national security and defence, Mr Dung said.