Prime Minister: GDP growth is likely to meet the target for 2016-2020

Prime Minister: GDP growth is likely to meet the target for 2016-2020 22/10/2018 03:47:00 530

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On 22/10/2018, after the opening session, the National Assembly heard the Prime Minister's report on the socio-economic performance in 2018 and the plan for socio-economic development in 2019, the mid-term review on the five-year socio-economic development plan 2016-2020 and the assessment on the implementation of the National Assembly's Resolution on the socio-economic development plan of 2018 and the first 3 year in the 5-year plan of 2016-2020; socio-economic development plan 2019 of the Economic Committee.

On 22/10/2018, after the opening session, the National Assembly heard the Prime Minister's report on the socio-economic performance in 2018 and the plan for socio-economic development in 2019, the mid-term review on the five-year socio-economic development plan 2016-2020 and the assessment on the implementation of the National Assembly's Resolution on the socio-economic development plan of 2018 and the first 3 year in the 5-year plan of 2016-2020; socio-economic development plan 2019 of the Economic Committee.

Growth will meet the target

In his opening report to the National Assembly Prime Minister Nguyen Xuan Phuc told that the socio-economic performance of Vietnam in 2018 continued to see positive changes. Particularly, the first 9 month GDP growth reached 6.98%, 2018 growth rate was estimated to exceed the target set by the National Assembly (6.7%); average growth rate in the 3 years of 2016-2018 increased 6.57% (the target of the 5-year plan is 6.5-7%). Consumer price index (CPI) was estimated below 4% for the year, the third consecutive year under 4%. The stock market continued to develop, becoming an important capital mobilization channel for the economy;

Total import and export turnover of the first 9 months reached over 352 billion USD, that of the whole year was estimated at 475 billion USD or an increase of 11.7%; of which exports 238 billion or an increase of 11.2% (target 7-8%); export surplus of the first 9 months reached nearly $ 5.4 billion.

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Overview of the meeting

State budget revenue was estimated to exceed 3% of estimates, with a more sustainable revenue structure. Domestic revenue increased, accounting for nearly 82% of total state budget revenues.

State budget expenditure was controlled strictly, economically and efficiently. The share of development investment was 26.8%, higher than the previous period (23.6%) and the plan for 2016-2020 (25-26%). The state budget deficit is estimated to be 3.67% of GDP, lower than the target of 3.7%, it was estimated at 3.4% by 2020 (target was less than 4%). Public debt is about 61.4% of GDP, decreasing sharply from 63.7% in 2016.

Total investment capital for development of the whole society was estimated at 34% of GDP for the whole year, 33.5% for the 2016-2018 period (32-34% for the 5 year target). The proportion of state investment decreased; the share of non-state investment increased, of which private investment was estimated at 42.4%. The average growth rate for the three years of 2016-2018 was 40.8%, higher than the 2011-2015 period (38.3%). Business investment environment continued to improve. To date, it has reduced, simplified 61% of business conditions and 60% of specialized import and export inspection procedures. Vietnam was ranked among the top-ten countries of strong commitments in terms of tax policy reform. There were about 130,000 newly registered businesses per year. The size of the economy increased dramatically, reaching an estimated VND5.5 trillion (US $ 240.5 billion) in 2018, more than 1.3 times that of 2015. GDP per capita was estimated at US $ 2,540, increasing by US $ 440 compared to 2015.

"With the current good trend, GDP growth in the period 2016-2020 was likely to reach the National Assembly's target of 6.5-7%, higher than the 2011-2015 average (5.91%). Many international organizations have evaluated Vietnam as having good prospects, being one of the fastest growing economies in the region and in the world, "Prime Minister Nguyen Xuan Phuc reported to the National Assembly.

Challenges

However, besides the results achieved, Prime Minister Nguyen Xuan Phuc also frankly acknowledged that the economic situation of the country was still having limitations and difficulties: Inflation pressure was still high due to the impact of many factors, especially exchange rate fluctuations, interest rates, crude oil price trends on the international market and the requirement to implement the price schedule for the electricity, education and health care services... The autonomy of the economy has been gradually improved but has not met the requirements; the resilience against external changes was limited. Disbursement of public investment, equitization of SOEs, divestment in many ministries and localities was slow. Production and business in many fields was still facing difficulties. The linkage between the FDI sector and the capacity and effectiveness of the domestic business sector, especially small and medium enterprises, was constrained.

In addition, some projects were having slow progress and poor quality. There were shortcomings in mechanisms and policies; business conditions, administrative procedures in some areas still caused difficulties for people and enterprises.

Although many international organizations have upgraded Vietnam's economy in many fields, especially in the business environment, the World Economic Forum (WEF) ranked Vietnam's global competitiveness in 2018 downgraded 3 levels in comparison to 2017 (77/140 versus 74/135 countries, territories).

In 2019, the Government set a target to consolidate the national macroeconomics, control inflation, improve internal capacity and autonomy of the economy, with specific targets: GDP increased by 6.6 - 6.8%; CPI by 4%; total export turnover d by 7-8%; the ratio of trade deficit to total export turnover below 3%; the total development investment capital for the society was 33 - 34% of GDP.

Speeding up the promulgation of legal documents

In his related report, Mr. Vu Hong Thanh - Chairman of the Economic Committee pointed out many issues that needed to be paid more attention to the socio-economic situation in 2018. Specifically, high growth rate but the evolution of economic growth of the last three quarters was different from the scenario of economic growth forecast early this year. This fact required a clear analysis of the dynamics of this growth to ensure a sustained growth.

Similarly for the socio-economic situation in 2016-2018, the Economic Committee noted: The quality of economic growth was improved but still not as expected. Export growth of the domestic economic sector has improved, but the trade deficit of this sector was still large and exports depended heavily on the foreign invested sector. Land lawsuits have been gradually decreasing year by year, but still complicated in many localities, focusing on land acquisition, compensation, resettlement and land dispute.

 

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Mr. Vu Hong Thanh - Chairman of the Economic Committee at his report presentation

The Chairman of the Economic Committee also noted that the revenue management has seen positive changes, the total state budget revenue surplus was expected to exceed the budget but is not yet sustainable and did not meet the requirements of the leading role played by central budget. Basic budget revenue was sufficient for recurrent expenditures, repayment of interest and a part of the accrual for investment; Revenues from three key economic sectors that did not meet the budget for the two years 2017 and 2018 have significantly affected the implementation of important tasks of the central budget as planned and put pressure on the goal of reducing budget deficit. Government guarantee debts for loans of SOEs were still high.

Regarding the solutions for 2019, the Economic Committee basically agreed with the groups of major tasks and solutions as stated in the Government's report and proposed to pay more attention to groups of solutions and tasks. In particular, it was necessary to first review, improve and speed up the promulgation of guiding documents; institutional improvements and the preparation of conditions necessary to implement and exploit the opportunities arising from the conclusion of free trade agreements.

With the results achieved and the restriction of the three years 2016-2018, the Economic Commission believed that the targets set out in Resolution No. 142/2016 on the five-year socio-economic development plan 2016-2020 can be achieved. However some indicators were difficult to reach without further breakthroughs, including the ratio of GDP per capita; the proportion of urban population using clean water; energy consumption per total gross domestic product; the ratio of industry and services to gross domestic product in the final year; rate of trained workers.

My Linh