Prospects for Vietnam’s economy in 2012

CA - Economists have described 2011 as one of the most difficult years for Vietnamese businesses in the past decade.

However, in the implementation of the Government’s Resolution 11, effective measures have been taken to iron out snags and gain positive achievements.

Tran Thi Hang, Deputy Director of the General Statistics Office, spoke to a VOV reporter about the prospects and challenges for the national economy in 2012.

VOV: What do you think about the prices of input materials for production in 2011?

Ms Hang: The government’s policy of managing prices according to market mechanism is on the right track. But how to implement it without putting businesses and consumers in a state of shock is another matter.

The improper price management in early 2011, including adjustments to the exchange rates along with a rise in the prices of electricity, petrol, and coal drove the consumer price index (CPI) up. The problem was the CPI remained high after the Lunar New Year and reached its peak in April, causing a lot of difficulties for both businesses and consumers. People had to cut their spending while businesses found it hard to sell their products.

VOV: What is your opinion about the operation of the banking system in 2011?

Ms Hang: The shortcomings in the operation of the banking system put businesses at a loss what to do with the credit crunch, and many on the brink of bankruptcy had to scale down their production. I think banks, businesses and consumers should have fair options for sharing benefits all along.

The Government is placing high hopes on reducing interest rates. But this is not as urgent as the need to keeping the rate of inflation at a single-digit figure, which will not only benefit businesses, banks, and consumers, but also stabilize the society. The high rate of inflation is mainly caused by the improper economic structure and growth models. So it is necessary to restructure the economy in the first place.

VOV: What should we do in 2012?

Ms Hang: The macroeconomy is being stabilized, inflation is being contained, and production is bouncing back. In 2012, we should keep a close watch on the European and US debt crises, which is likely to put a damper on Vietnam’s export performance and foreign investment attraction.

Fluctuations in the global prices of materials will be another challenge for businesses. In addition, what remains unsolved in 2011 such as the high rate of inflation, bank liquidation risks, bad debts, environment pollution and traffic problems will in part affect the country’s socio-economic developments in 2012.

The government has given priority to curbing inflation , stabilizing the macroeconomy, maintaining reasonable growth rates, and restructuring the economy to sharpen its competitive edge. Once put back on track, the economy will continue to grow and flourish.

VOV: Thank you very much!

According to Vietnam’s socio-economic development plan, it aims to maintain a six percent GDP growth rate and keep the rate of inflation at one-digit figure, State budget overspending at below 4.8 percent of GDP, credit growth at 13-15 percent, and trade deficit at 11-13 percent with export turnover increasing by 13 percent.