Top priority given to stabilizing macroeconomy

Against the backdrop of  world and national economic developments, it is maintained that there will be greater pressure to bear upon the government to fulfill this year’s major socio-economic targets approved by the National Assembly in its resolution.

Positive signs

With many economic sectors gaining momentum, Vietnam’s Gross Domestic Product (GDP) in the last quarter of 2012 is expected to reach 5.2 percent compared to the set target of 6-6.5 percent.

The service sector is predicted to grow by 6.3 percent, the industry and construction sector by 5 percent and the agro-forestry-fishery sector by 2.6 percent.

Analysing the quality of growth in recent months, both the government’s report and the NA Committee for Economic Affairs’s assessment report admit that there remains a major problem to be solved in this connection.

According to Tran Du Lich, a deputy from the HCM City NA delegation, there are snags in stimulating “growth" in harmony with “restructuring” measures.

In his view, it is crucial to prevent policies from creating a negative impact on the market and a price hike in essential goods such as electricity and gasoline.

Ha Sy Dong, another deputy from Quang Tri, says despite facing a lot of difficulties, Vietnam has managed to achieve stable economic growth and maintain national security and political stability.

In order to stabilise the macroeconomy, Lich proposed some specific measures to build confidence in consumers, businesses and investors.

Measures to solve bad debts and reduce inventory levels

He cites bad debts and high inventory levels as the two key problems that are hindering economic growth.

In the case of some commercial banks, they would rather lend more than get debt payment on schedule.

Some major businesses, even promising ones, have to scale down their production due to the lack of capital.

Lich argues that it is possible for banks to solve their bad debts worth VND202 trillion in total if they set up risk-reserve funds instead of shifting the burden onto the economic sectors.

He also stresses the need to make domestic businesses fully aware of their own problems, even possible risks of going bankrupt if they are too dependent on bank loans.

Meanwhile, Dong points out that the bank restructuring project to help businesses with  better access to capital is slow going at some point.

He proposes setting up credit guarantee funds to assist small- and medium-sized enterprises and cash-strapped ones in the first place.