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Lawmakers strike cautious note about high inflation
Vietnam’s economic expansion must be accompanied by efforts to control public debt and inflation, legislators said.
According to a government report released at a meeting of the National Assembly’s Standing Committee on Saturday, most of the economic targets set for this year will be achieved, including an annual inflation rate of 8 percent and a 6.7 percent growth in gross domestic product.
The government also projected an economic expansion of 7-7.5 percent and 7 percent inflation for next year.
But Phung Quoc Hien, Chairman of the NA’s Finance and Budget Committee, said keeping inflation at 7-8 percent a year should not be seen as a triumph.
“An economic growth of 6.7 percent would be more meaningful if inflation is controlled at a low level,” Hien said. “Other countries have inflation rates of 2-3 percent and they have already made efforts to control prices because they consider such rates too high.”
Vietnam has set its annual inflation target at 7-8 percent for several years and “this has to be reconsidered,” he said.
The Finance and Budget Committee said trade deficit and public debt expansions also posed problems to the economy.
Vietnam’s public debt is expected to reach 52.6 percent of the GDP this year and then expand to 57.1 percent in 2011, according to the government report.
Many legislators said they are concerned that these ratios pose grave threats to the safety of the economy.
Ha Van Hien, chairman of the Economy Committee, said the problem is that, while debt is expanding, it has not been used effectively.
Truong Thi Mai, chairwoman of the Social Affairs Committee, said she's worried about Vietnam's future: the national debt is huge and the country’s GDP growth has been forecast to slow down after 2020.
The government has set a budget deficit target at 5.5 percent of GDP for 2011, but the Finance and Budget Committee requested the target to be lowered to 5 percent only, or VND120 trillion.
Vietnam plans to raise minimum wage to from VND730,000 to VND830,000 a month in May of next year. The government estimated that VND27 trillion from its budget will be use to finance the plan.
Thanh Nien, Agencies
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