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Control inflation to protect the poor

President Nguyen Xuan Phuc has said that the economic stimulus package needs to be “brought into life” to help people and businesses, and that inflation should not be allowed to “sweep the poor away”.
Tran Hoang Ngan, NA Deputy

National Assembly deputies had a working session on May 25 discussing solutions to recover the economy in the post-pandemic period. 

HCM City Mayor Phan Van Mai said the City has successfully controlled the Covid outbreak and economic recovery and development has been going strongly. The industrial production rate has increased 2.6 percent. This is the fourth consecutive month of positive growth after a long period of negative growth.

The budget collections have fulfilled 54 percent of the yearly plan and the number of new businesses has increased again. Imports and exports have been going well.

However, Mai said that some problems still exist. The growth rates of large industries are still low, while the real estate market is still -12.6 percent.

“Did we break the vase when we tried to strike the mouse?” he asked.

He proposed that the National Assembly and Government focus on speeding up the economic stimulus packages, while ministries and branches need to focus on helping enterprises ease difficulties.

Petroleum price 

Tran Hoang Ngan, a National Assembly Deputy from HCM City, said economists around the world have warned of big challenges in the remaining months of the year, especially for economies with high openness.

Inflation is increasing in many countries as a result of economic stimulus policies. Energy, food, and hunger and poverty have become problems discussed at the world’s economic forums.

Many countries have lowered their growth indexes by 1-15 percent. 

The International Monetary Fund (IMF) predicted a growth rate of 6 percent in 2022 and 7 percent for 2023. However, the predictions will be updated and adjusted in accordance with the real situation.

Ngan emphasized the risk of inflation. Vietnam has experienced high inflation many times in the past. The most serious spell occurred in 1986, when Vietnam began Doi Moi (renovation) and the latest occurred during the 2008 economic recession. The inflation rate then climbed to 23 percent. The inflation rate was two-digit in 2011.

“At that moment, we had to use a ‘drug’ at a high dose to control inflation, stabilize the macro economy and ensure social security,” Ngan said.

He said that there must be solutions to control petroleum prices and not let the petrol price increase too sharply.

“We need to use tools to control the inflation rate. The tools include an environmental protection tax. We have to cut the tax by 50 percent and we can think of a further cut. And we can cut the luxury tax on petroleum products. The products are no longer special and luxury products, but are essentials and there’s no reason for us to impose a luxury tax on the products,” Ngan said.

He said that if Vietnam doesn’t control petroleum prices, the prices of other products and services will escalate as a result of the domino effect, which will adversely affect people’s lives.

Solutions

President Nguyen Xuan Phuc agreed with Mai that HCM City has recovered very quickly in all industrial production fields and created jobs.

However, there are many problems. People and businesses still have difficulties. Phuc repeated a question raised by some economists about why state budget collections are very high when enterprises still face big difficulties.

He agreed that it is abnormal in the context of the lowest growth rates in decades because of Covid-19. 

Mentioning the ongoing 52nd annual conference of the World Economic Forum (WEF) with the theme about food, he said Vietnam is fortunate to be an agriculture country. However, he warned that weather conditions are erratic. Meanwhile, people have rushed to withdraw social insurance money, which causes more difficulties for socio-economic development.

Regarding the stock market, President Phuc said there must be more measures to stabilize the market. Businesses can seek capital through two important channels – bank loans and corporate bonds. It is necessary to control the bond market well because it is very important to businesses.

He admitted that the deployment of support packages has been slow and not many people and businesses can get benefits from the packages. If support packages cannot come on time, businesses and people will still be in big difficulties. Don’t let the inflation sweep the poor away.

Tran Thuong

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