Deputy Prime Minister Nguyen Sinh Hung, speaking at the opening of the National Assembly session in Hanoi on Wednesday (20 May 2009), said this year’s target should be reduced to 5% from the previous 6.5%. He noted a lower growth target would help create momentum for more sustainable development in the years to come.
 

Production has contracted as a result of global economic recession, thus affecting the country’s budget revenue, Hung said. “It’s stressful to ensure a budget balance.” The demand for more budget spending, especially on the Government’s economic stimulus packages totaling about US$8 billion, is rising while the budget revenue is dwindling, he said.
 

The balance of payments is not sound and this will have an adverse effect on other macro balances which are being stabilized at the moment, though, he read a Government report before the legislature. He called for the lawmakers to approve adjustments such as rescheduling or reducing taxes to fully tap public resources and thus help producers and people ride out tough times. However, the National Assembly Economic Committee asked the Government to thoroughly look into data to make their forecasts more correctly reflect the reality.
 

In November or December, 2008 economic growth was forecast at 6.7%-6.8%, but actual growth was 6.18%, the lowest level in nearly a decade, said a committee report. “This affected the setting of social and economic targets for the following year.”
 

The committee said the Government was cutting down on public investments and fighting inflation, but the outcome was that total investments in the economy still rose to 41.3% of GDP compared to the 39% approved by the legislature. The country’s first-quarter growth was a mere 3.1%. The committee, therefore, urged the Government justify its proposal for lowering the economic growth target. The World Bank’s estimate puts Vietnam’s 2009 growth at 5.5% while the International Monetary Fund’s (IMF) forecast is 3.5%.
 

In a report on about 2,500 suggestions sent to the National Assembly session by the public, the Central Fatherland Front Committee said voters were concerned about the Government stimulus packages because financial support could be used for wrong purposes.
 

The corporate sector asked the lawmakers to reconsider power tariff hikes for peak hours, which it said had impacted on the manufacturing sector, bauxite mining in the Central Highlands and other issues such as school fee increases and equitization of public schools, says the report.