The government will continue to introduce solutions to stabilize the macro economy and rein in runaway inflation, striving to achieve a GDP growth rate of 6.5 percent set for this year.

From the left: Deputy PM Nguyen Sinh Hung, PM Nguyen Tan Dung and Deputy PM Pham Gia Khiem.

Prime Minister Nguyen Tan Dung made the statement at a monthly Cabinet meeting in Hanoi from March 30- April 1, which looked at the economy in the first quarter of this year.

He echoed Cabinet members, saying that Vietnam has been on the right track to recovery with GDP increasing by 5.83 percent, industrial production by 13.6 percent, construction by 17.4 percent, agro-forestry and fisheries by 5.8 percent, and services by 6.64 percent.

The domestic market developed steadily in the past three months with total retails of commodities and services going up by 24 percent. Budget collection met one fifth of the annual target, total social development investment rose by 26.23 percent, and the non-state sector achieved a 46.38 percent increase.

However, the agricultural sector is coping with difficulties, including prolonged drought and epidemics, which will affect production and farmer incomes. The consumer price index surged by 0.75 percent in March, bringing the three-month figure to 4.12 percent. Exports fell by 1.6 percent while imports rose by 37.6 percent. Many businesses still found it hard to get access to bank loans due to galloping interest rates.

Prime Minister Dung acknowledged that the 5.83 percent economic growth in the first quarter is rather low compared with the corresponding period of the previous years, and said more solutions will be put forward to revamp the economy.

He asked the State Bank of Vietnam to continue with a pro-active and flexible monetary policy to monitor credit growth, which stood at a low level of 2.19 percent, so as to fuel the economy and nip in the bud high inflation.

He reminded the central bank to regulate the interest rates in a flexible manner with a focus on lowering the rates to ensure the market law of supply and demand. He also instructed the bank to apply the negotiated interest mechanism to successful businesses, and encourage commercial banks to reduce the interest rates, while regulating the exchange rates close to market prices to improve trade balance.

The PM proposed that the Financial-Monetary Council meet every week to iron out snags in policy management to meet the requirements of the economy.

He assigned the Ministry of Industry and Trade and the Ministry of Finance to review the supply and demand of commodities for production and domestic use to facilitate commodity circulation and keep market prices in check.

To improve trade balance, the PM asked ministries and agencies to control prices, investment and public spending, and use tools flexibly to boost exports and reduce imports. He said a greater effort should be made to encourage Vietnamese people to use locally made products, develop the support industry, and effectively disburse capital from the State budget, government bond sales and official development assistance (ODA).

He also asked the designated ministries and agencies to speed up administrative reform and communications to provide sufficient and accurate information to the public.

At the meeting, Cabinet members gave opinions on a draft strategy for social welfare in the 2011-2020 period and reviewed a pilot programme of not running the district and ward People’s Councils in the local State apparatus.

They discussed amendments to the Law on Residence, and bills on employees, protection of consumer rights, the State bank of Vietnam (revised), and credit organisations (revised). They also looked at a draft decree to hand down heavier fines to road users who break traffic laws, especially in big cities like Hanoi and HCM City.

The Cabinet members proposed that the government introduce policies to attract talents, create conditions for employees to work overtime and support the hiring of experts. They also proposed that the government apply bold measures to control product quality and trade fraud to ensure the legitimate rights of consumers.

Source: VOV