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