VietNamNet Bridge – The chair of the National Assembly’s Economics Committee expressed doubts about the government-reported GDP growth rate at a socio-economic appraisal session on October 9. However, the government’s representative said the report was factual.

The Chair of the Committee, Nguyen Van Giau, commented that the government’s report on socio-economic development was “unconvincing”.

Giau said it was unreasonable that Vietnam could obtain an economic growth rate higher than that of the previous years, when investment was on the decrease and numerous enterprises had closed or gone bankrupt.

He also pointed out that it was hard to believe that 1.6 million new jobs were created every year in the context of the current economic difficulties and the increasingly high number of bankrupt businesses.

According to Giau, the members of the Economics Committee think the targeted 6.19 percent GDP growth rate in the third quarter and 5.62 percent in the first three quarters of the year were “groundless”.

Giau cited a report as saying that 51,244 businesses went bankrupt or were dissolved in the first nine months of the year. Meanwhile, 18,873 businesses suspended their operations, and only 52,525 businesses were newly established.

“I know that a lot of medium- and large-size businesses have to stop operation, though they still could hold out in the last few years,” Giau said. “Their deaths will have a negative impact on the labor force, state budget, banks’ bad debts and economic growth, and will lead to an increase in economic crime.”

Also, according to Giau, 213,000 businesses have declared losses, which accounts for 68.6 percent of the businesses submitting reports.

The statistics released by Giau show the unsatisfactory performance in many different fields of the national economy. The inventory index, for example, is 13.4 percent higher than that in 2013.

Meanwhile, the process of settling banks’ bad debts has been going at a snail’s pace. To date, 17 percent of bad debts have been reportedly dealt with. VAMC, the Vietnam Asset and Management Company, which began its operation in late August 2014, has reportedly bought 3,281 debts with the total principal balance of VND56 trillion.

There are some signs showing that the bad-debt ratio of the banking system is increasing again. The ratio was 3.61 percent in 2013, then rose to 4.07 percent by the end of May 2014 and to 4.11 percent by the end of July.

However, Minister of Planning and Investment Bui Quang Vinh at a working session released figures to prove that the situation was getting better.

“Significant improvement can be seen in all the business fields in the first nine months of the year,” Vinh said.

“The national economy continues its recovery trend with a higher quarter-on-quarter growth rate,” Vinh commented.

TBKTSG