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MPI will propose economic restructuring plan by year-end, says Minister
Minister of Planning and Investment Vo Hong Phuc, speaking to reporters May 27 on the sidelines of a National Assembly session, said that his ministry is coordinating a plan for restructuring the national economy. It will be submitted to the Government for approval by the end of the year.
Statistics show that exports have increased recently, while industrial production has increased slowly….
It is true. The Government’s report also stressed that the situation in the first quarter of this year was quite different from the same period of the previous years. Exports decreased, industrial production grew slowly, while our trade deficit was also a problem. The Government has referred to the figures to make forecasts about the GDP growth rate for 2009.
Many deputies have questions about the 5 percent GDP growth rate target suggested by the Government. What is the basis for the Government’s suggestion?
The five percent GDP growth rate target was chosen after consideration of forecasts submitted by offices of the Ministry of Planning and Investment. All the forecasts said the GDP growth rate would be in the 4.5 to 5.6 percent range this year. We also considered figures and forecasts provided by the General Statistics Office.
Specifically, what’s behind your 5 percent economic growth rate forecast?
We considered the possible industrial, agricultural and service sector growth. Agriculture is expected to grow by three percent. That’s been constant for many years. Industrial production, though it fell in the first quarter, now tends to increase (it grew by 5.4 percent in April). We believe that the industrial production in 2009 will grow by more than five percent, and so will the service sector.
Economists have expressed worry about the return of high inflation, especially when we have put a big sum of money into circulation. . . .
We have been aware of the risk, and so we have recommended a close watch over the consumer price index.
The National Assembly’s resolution stipulated that the consumer price index must be held below 15 percent this year. However, the Government aims to lower the index target to below 10 percent, which means that inflation would be curbed at the one digit level. The Government needs to take drastic measures to make the figure as low as possible
What are the measures, then?
Trying to maximize revenues and hold the budget deficit to no more than eight percent. We have to take measures to manage investments more effectively and economise in regular spending to ensure we meet that target.
How can we increase the revenues?
Our policies anticipate a decrease in receipts, but the budget deficit must not be higher than eight percent.
Suppose the National Assembly does not accept the eight percent budget deficit, and insists on seven percent, for example?
The Government is considering different scenarios to calculate the possible budget deficit. The Standing Committee of the National Assembly will collect opinions from deputies and discuss with the Government to find out reasonable solutions
Many deputies have expressed their worries about the high ICOR (incremental capital output ratio). . . .
It is true the ICOR of the last five years is higher than in the five years that preceded them. However, I have to remind you that in developing countries which pay much money for social security, the ICOR is always high.
Economists say that the Government needs to draw up a plan to restructure the national economy…
The Ministry of Planning and Investment is compiling a plan which we will submit to the Government for approval by the end of the year. Our goal is to obtain economic growth with highest possible quality. Two core matters that we need to adjust are the human resources and infrastructure. Human resources are our weakest point
vietnamnet, vnmedia
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