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MPI can see bright prospects of the national economy
A report has been sent by the Ministry of Planning and Investment (MPI) to the National Assembly’s Economics Committee, which says that the national economy in the last six months was not entirely leaden. New positive signs have appeared which the ministry believes will become clearer in the upcoming months.
According to the ministry, the dong/dollar exchange rate and the foreign currency market have become stable. Commercial banks have successfully purchased foreign currencies from people and businesses. The dollar price on the foreign currency market is on the decrease, while the exchange rates quoted by commercial banks are usually lower than the ceiling rates.
“The foreign currency reserves have been improved. The State Bank of Vietnam has purchased three billion dollars for the reserves,” the report by MPI reads.
By June 10, 2011, according to MPI, the total money supply (M2) had increased by 2.33 percent only in comparison with December 2010, while the outstanding loans had increased by 7.05 percent.
The export has witnessed a relatively high growth rate: the total export turnover in the first six months of the year reached 41.5 billion dollars, an increase of 27.8 percent over the same period of the last year. The figure is triple the target approved by the National Assembly. The export turnover of foreign invested enterprises reached 19 billion dollars, not including the export turnover from crude oil export, which represents the 28 percent increase over the same period of the last year.
However, a question has been raised that if the export growth rate target was too low which makes it unable to accurately assess the export growth.
The export turnover of many products in the last six months increased very sharply. The export turnover of coffee, for example, increased by 81 percent, rubber by 96 percent (though the export volume increased by 24.5 percent only), and garment products by 30 percent. The export items’ price increase is an obvious trend.
The Ministry of Industry and Trade has also pointed out that the export price increase alone helped the total export turnover increase by 2.7 billion dollars. The high demand from big markets and the price increases have helped boost Vietnam’s exports to the markets. The exports to the US for example increased by 22 percent, to the EU by 35 percent, and to Japan by 23 percent. Especially, the exports to China increased most sharply by 40 percent.
However, the imports have also increased rapidly. In the first half of the year, Vietnam imported 49 billion dollars worth of products, an increase of 26.4 percent over the same period of the last year. This has resulted in the increase of the trade deficit to 7.5 billion dollars, or 18 percent of the total export turnover, which is higher than the target set earlier by the government at 16 percent.
A positive sign of the national economy that MPI has pointed out is that the consumer price index (CPI) increase slowed down in May, after rapidly increasing in the first months of the year. MPI has predicted that the CPI in June would increased by one percent, which is much lower than the highest increase seen in April at 3.32 percent and the 2.21 percent increase in May.
As such, the CPI in June increased by 13 percent over December 2010, which gives MPI the reasons to predict that the CPI would increase by 15 percent in the whole year 2011.
Also according to MPI, since Vietnam has gathered strength on fighting inflation and stabilizing the macro economy, the GDP growth has been slowing down: the GDP growth rate in the first half of the year was 5.6 percent, lower than 6.16 percent gained in the first half of 2010.
MPI has pointed out that the national economy is still facing big challenges. First, the tightening of the monetary policies has caused difficulties to businesses, because they do not have capital to maintain production. Second, the trade deficit tends to increase and exceed the targeted level which may influence the improvement of the payment balance. And third, the input material prices keep rising, which would lead to the continued increases of goods’ prices.
In the report about the public investment cut sent on the same day, MPI said that local authorities and branches have planned to cut investments of 2048 projects which have the total investment capital of 5556 billion dong.
vietnamnet, SGTT
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