In the opening meeting of the 7th National Assembly session, Deputy PM Nguyen Sinh Hung said that the government is pursuing goals set for 2010, including GDP growth at 6.5 percent.

In the opening meeting of the 7^th National Assembly session this morning, Deputy PM Nguyen Sinh Hung said that the government is pursuing goals set for 2010, including GDP growth at 6.5 percent.

Deputy Prime Minister Nguyen Sinh Hung.

After NA Chairman Nguyen Phu Trong’s opening speech, Deputy PM Hung presented the government’s report on the economic and social situation in 2009 and early months of 2010 and solutions to achieve 2010 goals.

According to the report, Vietnam avoided economic slowdown in 2009 and gradually recovered, maintaining macro-economic stability and social welfare. The Government exceeded targets for 2009 in some aspects: the total import-export revenue for 2009 dropped only 8.9 percent instead of an expected 9.9 percent; total social development investment reached 42.7 percent, not 42.2 percent as previously anticipated; the consumer price index (CPI) rose only 6.52, not 7 percent.

The Government observed that last year, Vietnam achieved a high growth rate in difficult conditions caused by the global economic slowdown and natural disasters. The country’s GDP improved gradually each quarter, from 3.14 percent in the first quarter to 6.9 percent in the fourth quarter. The yearly GDP is 5.31 percent compared to the set target of 5.2 percent.

Industrial production in 2009 also quickly resumed, thanks to effective policies supporting production and market development. The industrial production value surpassed expectations, rising by 7.6 percent, not 7.2 percent as targeted in the previous session.

The Government admitted that GDP growth rate in 2009 is the lowest in the last decade. Overspending was high, accounting for 6.9 percent of GDP even though budget revenues increased. They explained that the Government had to spend more to protect Vietnam from the economic crisis.

At the previous NA session in late 2009, the NA set GDP growth rate 2010 at 6.5 percent, import-export revenue to grow by over 6 percent, while CPI and credit growth was not to exceed 7 and 25 percent.

The economy continued its recovery in early 2010, with GDP growth for the first quarter at 5.83 percent on average. Industrial production value also increased by 13.6 percent in January-April period compared to 3.3 percent in the corresponding period of 2009. However, CPI rose by 4.27 percent in this period and the Government recently proposed setting the inflation target at 8 percent this year.

The social and economic situation in the early months of 2010 is positive and inflation is still under control but the macro economic situation is not very stable and faces many newly-emerging challenges. The biggest challenge is the rising trade deficit, the return of inflation, and difficulty for businesses’ to access capital.

Despite this, Hung said the government is on track to achieve the goals set for 2010. The government proposed seven groups of major missions from now to the year end, in which stabilizing macro economics, controlling inflation, and achieving 6.5 percent of GDP growth rate.

The NA’s Committee for Economics, which is responsible for evaluating the government’s economic report, said that maintaining macro economic stability must be considered as the top priority at present and therefore controlling inflation, improving the balance of payment, reducing budget deficit are the key missions.

The committee pointed out 8 out of 25 targets that the government failed to achieve last year, mainly social and environmental norms.

The committee said that the quality of forecast and statistical models is poor. The gap between statistics and the actual results of some significant norms is too big, especially in budget spending and revenue, which affects the job of policy-makers.

The committee’s chairman Ha Van Hien recommended the government to be careful in considering and approving big projects because it is difficult to raise capital now.

This report will be considered and discussed in groups on May 22.

Le Nhung