VietNamNet Bridge – On the sideline of the Congress session, the Minister of Planning and Investment, Vo Hong Phuc, talked with the media about signs of economic deceleration.

Minister of Planning and Investment Vo Hong Phuc.

He said that as the world economy is in a difficult situation, Vietnam is affected in some aspects, at different levels, including export and direct investment. The Government discussed and defined that the country’s economic growth rate this year will reach 6.5-6.7%.

He said: “There is a question about whether Vietnam’s economy faces deflation? I can confirm the government’s point of view about this issue: not yet. Because to define deflation we need many factors, first, the consumer price index (CPI), secondly, economic growth, and thirdly, the people’s purchasing power. However, there are signals suggesting slower economic growth and deceleration. As such, the Government has put forward solutions for 2009 and readjusted comprehensive goals.”

“Previously, our goal was to give priority to controlling inflation, stabilizing macro-economy, maintaining a reasonable growth rate, and assuring better social welfare. The Government proposed three amendments: Firstly, not giving priority to, but continuing to control inflation; secondly taking initiative in preventing a slowdown; and thirdly really ensuring social welfare.

Based on this, the government reconsidered the possibility for economic growth in 2009, which is set at around 6.5%.”

Phuc said economic slowdown can lead to the cutting down of jobs, especially at small- and medium-sized enterprises (SMEs). The Government has worked out measures to stimulate domestic production, consumption, export, to expand new markets and assist businesses by lowering the prime interest rate. In case SMEs face difficulties, the Government could propose to the National Assembly that taxes be slashed or grant tax exemptions in some fields.

Phuc also said that the Ministry of Planning and Investment proposed to cut budget spending and investment spending by around VND 6 trillion ($352.9 million).

PV