Prime Minister clarifies Government’s viewpoint on macro-economic stability

Hanoi (VNA) – Prime Minister Nguyen Xuan Phuc highlighted keeping macro-economic stability, creating a favourable environment for production and business, and promoting rapid and sustainable development as the tasks of the Government to steer the national economy in the future in a recent article.

He wrote that keeping macro-economic stability is an important and consistent requirement in developing a socialist-oriented market economy. 

“To bring into play the outcomes attained over the past time, we have to continue making efforts to create a more solid and stable macro-foundation in 2018 and the following years, thus creating a favourable environment and conditions for promoting production and business, and helping to successfully implement the socio-economic development targets and tasks in 2018 and the five years from 2016 to 2020 under the Party and National Assembly’s resolutions.”

PM Phuc noted despite internal and external difficulties and challenges in 2017, the country’s socio-economic situation improved comprehensively in all fields. Particularly, the macro-economic stability continued to be maintained, featuring a great success and greatly contributing to production and business development and economic growth.

The strict, flexible and effective monetary policy implemented in tandem with the fiscal, trade, investment, price and market policies made an important contribution to controlling inflation at the set rate, he said.

He added that the surge of export, a trade surplus of 2.8 billion USD, and the strong inflow of foreign direct investment and overseas remittances into Vietnam helped improve the balance of payments and raise foreign reserves to nearly 60 billion USD.

Meanwhile, stable exchange rates and the decline trend of interest rates in line with the inflation situation helped to facilitate production and business activities. In 2017, the state budget balance was improved while state budget collection was 5.9 percent higher than the estimated figure, helping to reduce budget overspending to 3.48 percent and public debt to 61.2 percent of the country’s GDP.

The Cabinet leader wrote that the stock market – the “barometer” of the economy – has risen sharply, at about 1,050 – 1,100 points at present. Economic growth no longer depends on short-term demand stimulation solutions and the mining industry. It reached the highest level since 2007, making Vietnam among the countries with the fastest growth in the region and the world. Most of the economic sectors posted fair growth, created jobs and income, and helped people lead a stable life.

Aside from the stable macro-economy, the investment and business climate of Vietnam has been improved considerably, climbing 14 places from the 82nd to the 68th position among 190 economies. The country’s competitiveness index also increased, from the 60th to the 55th position among 137 countries and territories. The outlook for the local banking system was upgraded from “stable” to “positive”.

PM Phuc said Vietnam’s reform determination and the attained achievements have created a heartening atmosphere in investment and business activities and the whole society, thereby reinforcing investors and businesses’ trust.

The successful organisation of the APEC Year 2017 also greatly helped to heighten Vietnam’s prestige and stature in the international arena, he added.

He stressed that the country is entering a new stage of development with mixed opportunities, advantages, difficulties and challenges.

The Government will, therefore, steer the macro-economy in the time ahead in a drastic, proactive and flexible manner, harmoniously and synchronously combining policy tools to ensure the macro-economy’s firm stability and major balances of the economy, striving to have 2018’s growth rate higher than 2017’s, and creating a foundation for more rapid and sustainable growth in the following years, he underlined.

Noting several key solutions in the coming time, PM Phuc said the Government needs to implement a prudent and effective monetary policy, along with a strict and thorough fiscal policy to ensure financial and state budget discipline in all sectors and at all levels.

Meanwhile, it is necessary to ensure reasonable allocation of resources nationwide, for each sector, region and locality, he noted, adding that the Government will continue the roadmap on electricity market prices so as not to subsidize power prices and educational and healthcare services but still support policy beneficiary and low-income earners.

Another solution is promoting production and business development to create a solid micro-foundation for macro-economic stability. The country also needs to mobilise and effectively use technical assistance, learn from other countries’ experience, and enhance the macro-economic analyzing and forecasting capacity in terms of the whole economy and each sector and locality.

Last but not least, the Government needs to comprehensively improve policy coordination and the leadership and steering activities of the state administrative apparatus, while doing a good job of corruption and wastefulness prevention, helping to reinforce investors, businesses and people’s trust, PM Phuc wrote.

In the article, he said with many optimistic signs in the international and domestic situation, the macro-economy and growth in 2018 are forecast to continue improving.

“However, we must completely not be subjective amid the rapidly changing and unpredictable situation with many hidden risks,” he added.

Perfecting institutions, keeping macro-economic stability, and creating an optimal investment and business environment is important to bringing into play the State’s role of enabling growth in developing a socialist-oriented market economy under the Party’s guidelines on reform.

Meanwhile, determinedly and persistently keeping macro-economic stability and not boosting growth at all costs is a consistent target in the Government’s steering work, the leader said.

He added steering the macro-economy is a science and also an art, requesting all-level authorities at and sectors be proactive and flexible while closely keeping an eye on the reality and unceasingly making reforms and innovation, thus promoting Vietnam’s economy on the path of rapid and sustainable development.-VNA