It is an upbeat sign that Vietnam’s consumer price index (CPI) rose at a slow pace in the first six months of 2014, said Dr. Tran Hoang Ngan, member of the National Assembly Economic Committee in an interview with Nhan Dan (People) newspaper.
*Data released by the General Statistics Office showed that the CPI in the first six months of 2014 increased at a slow pace. What do you think about this?
In June, consumer prices rose by 0.3 percent against the previous month, 1.38 percent compared with December 2013 and 4.98 percent from twelve months earlier. The data suggested that inflation was under the Government’s control and the inflation target of 7 percent or less was within reach.
The price increases were primarily driven by adjustments to schooling and medical fees. It showed that the economy’s total demand increased but very slightly, so we need to have policies to increase total demand, thereby accelerating economic recovery. Specific measures include boosting sales, reducing inventory levels and stimulating business activities.
*Is boosting consumption and sales of goods and services, the most radical and necessary solution at the moment?
I think the most important thing to do now is not encouraging consumption but increasing total social investment, including investment from the State sector and especially capital from issuing Government bonds.
This is an important source of capital but as we can see the rate of disbursement has been very slow. We need to expedite capital disbursements, thereby contributing to increased total investment.
*It is obvious that the economy’s total demand in the past six months has risen very slowly. So what measures do we need to carry out to boost economic growth?
I think for now we have to place the Vietnamese economy under a dynamic state, meaning that economic measures must be very flexible. We can prioritise this indicator and downgrade the others.
We can even halt some projects to put more investment into other ones that can boost economic development in a sustainable way, strengthen economic self-reliance and reduce dependence on a specific market or country.
I think we should work out two groups of solutions including long-term and short-term solutions.
Regarding long-term solution, it is necessary to promote the completion of market-oriented economic institutions towards deeper integration into the world economy and in conformity with international commitments to which Vietnam is a signatory.
In addition, it is advisable to accelerate national economic restructuring with the focus on hastening equitisation of State-owned enterprises.
Concerning short-term solution, I think that the Ministry of Finance, relevant ministries and sectors, and local authorities have actively and quickly provided assistance for enterprises affected by the incidents of May 13 and 14 and pledged a stable environment for their business activities, regaining the trust from foreign investors in Vietnam. At the same time, we should disseminate information on Vietnam to attract more international investors and tourists.
Furthermore, the Government needs to devise comprehensive measures to support domestic enterprises, particularly small- and medium-sized enterprises (SMEs), helping them gain better access to bank loans.
The Government should provide mechanisms and capital assistance to credit guarantee funds, which will help extend the guarantee for SMEs to access loans. Other supporting activities should be implemented to assist SMEs such as setting up funds for SMEs, establishing centres and providing consultancy for them in the areas of administrative procedures, trade promotion and others.
The Government should consider a preferential credit package with low and fixed interest rates over a five- to ten-year period to help SMEs restructure, innovate their technology and increase productivity.-VNA
*Data released by the General Statistics Office showed that the CPI in the first six months of 2014 increased at a slow pace. What do you think about this?
In June, consumer prices rose by 0.3 percent against the previous month, 1.38 percent compared with December 2013 and 4.98 percent from twelve months earlier. The data suggested that inflation was under the Government’s control and the inflation target of 7 percent or less was within reach.
The price increases were primarily driven by adjustments to schooling and medical fees. It showed that the economy’s total demand increased but very slightly, so we need to have policies to increase total demand, thereby accelerating economic recovery. Specific measures include boosting sales, reducing inventory levels and stimulating business activities.
*Is boosting consumption and sales of goods and services, the most radical and necessary solution at the moment?
I think the most important thing to do now is not encouraging consumption but increasing total social investment, including investment from the State sector and especially capital from issuing Government bonds.
This is an important source of capital but as we can see the rate of disbursement has been very slow. We need to expedite capital disbursements, thereby contributing to increased total investment.
*It is obvious that the economy’s total demand in the past six months has risen very slowly. So what measures do we need to carry out to boost economic growth?
I think for now we have to place the Vietnamese economy under a dynamic state, meaning that economic measures must be very flexible. We can prioritise this indicator and downgrade the others.
We can even halt some projects to put more investment into other ones that can boost economic development in a sustainable way, strengthen economic self-reliance and reduce dependence on a specific market or country.
I think we should work out two groups of solutions including long-term and short-term solutions.
Regarding long-term solution, it is necessary to promote the completion of market-oriented economic institutions towards deeper integration into the world economy and in conformity with international commitments to which Vietnam is a signatory.
In addition, it is advisable to accelerate national economic restructuring with the focus on hastening equitisation of State-owned enterprises.
Concerning short-term solution, I think that the Ministry of Finance, relevant ministries and sectors, and local authorities have actively and quickly provided assistance for enterprises affected by the incidents of May 13 and 14 and pledged a stable environment for their business activities, regaining the trust from foreign investors in Vietnam. At the same time, we should disseminate information on Vietnam to attract more international investors and tourists.
Furthermore, the Government needs to devise comprehensive measures to support domestic enterprises, particularly small- and medium-sized enterprises (SMEs), helping them gain better access to bank loans.
The Government should provide mechanisms and capital assistance to credit guarantee funds, which will help extend the guarantee for SMEs to access loans. Other supporting activities should be implemented to assist SMEs such as setting up funds for SMEs, establishing centres and providing consultancy for them in the areas of administrative procedures, trade promotion and others.
The Government should consider a preferential credit package with low and fixed interest rates over a five- to ten-year period to help SMEs restructure, innovate their technology and increase productivity.-VNA
