As 2010 is ended, a series of important events happened in Vietnam’s economy, one of which is the surge of bank interest rates. Economic experts and administrators could not give a proper explanation for the unreasonable increases which worried businesses and people. Prices of gold and the US dollar also saw sharp rises despite the decline of their prices in the global market.

In addition, the domestic market experienced a significant increase in the prices of consumer goods, making 2010’s Consumer Price Index (CPI) rise by 11.75 percent (exceeding the set target of 5 percent). Vietnamese Tra fish, which accounts for 95 percent of the world’s output, were put on the Red List in the 2010 seafood consumption report by the World Wide Fund for Nature (WWF) without any scientific grounds.

In October and November, the central region was struck by floods which caused great losses in human lives and property. Unusual low pressures and droughts also had negative impact on agricultural production.

These are only some of the complicated problems Vietnam’s economy faced in 2010. Besides, the Gross Domestic Products, inflation rate, the CPI, export growth, credit growth, gross social investment, and foreign investment are all important figures that reflect the economic trends and affect people’s lives. Vietnam will create a stable economic environment for sustainable development if it is able to keep all the rates under control.

In 2010, Vietnam enjoyed a 6.7 percent GDP growth rate, higher than the set target of 6.5 percent. However, while the National Assembly set a target to keep the CPI at 7 percent, which it then raised to 8 percent, the inflation rate reached a double digit figure of 11.75 percent by the end of the year.

The increase in inflation rate is partly attributed to Vietnam’s effort to increase GDP growth rate in early 2010. Like in 2009, in the first half of 2010, the economy experienced stabilisation and the country focused much on increasing the growth rate. However, the inflation rate saw a sharp increase in the second half and especially in the last quarter of 2010.

In response to the problem, various policies and measures were introduced by agencies and localities to stabilise the macro-economy and curb the inflation rate. Together with the adjustment of the interest rates by the State Bank of Vietnam (SBV), many central and local inspection delegations were established to supervise the price management. In addition, numerous policies were introduced to control public spending, investment and import. However, economists said the measures were not timely enough to control the growing inflation.

On the other hand, tightened monetary policy would affect investment activities as credit tightening would increase loan interest rates which may cause a rise in the cost of production. This would then make the prices of production surge so again inflation rate could not be controlled. Therefore, the tightened monetary policy should be imposed for a short period of time only to create better conditions for economic development.

At the year-end meeting of the National Assembly, the NA pointed out the shortcomings of Vietnam’s economy such as unsustainable economic growth, slow economic restructuring, the poor infrastructure, ineffective investment, import surplus, overspending of the State budget, environmental pollution, and the low living conditions of people in ethnic and disadvantaged areas.

There remain challenges facing Vietnam in the early days of 2011 such as droughts affecting winter-spring crop, the shortage of electricity, and environmental pollution caused by some businesses.

The NA set a target to stabilise the macro-economy and control the inflation rate by increasing the target growth rate to 7-7.5 percent and keeping the CPI at below 7 percent. This reflects Vietnam’s effort to ensure economic stability and social welfare for a sustainable development.