Not much room for growth, bottlenecks must be urgently removed: Minister
Recognizing that there is not much room for growth, the Minister of Planning and Investment suggested that along with strengthening measures to prevent and control the Covid-19 epidemic, it is necessary to urgently remove bottlenecks in the economy.
|Minister of Planning and Investment Nguyen Chi Dung.|
At a cabinet meeting on August 11, Minister of Planning and Investment Nguyen Chi Dung read a report on Vietnam’s socio-economic situation in January-July.
According to the report, the macro-economy was basically stable, inflation was controlled, and major balances of the economy continued to be ensured. The average CPI in the period rose by 1.64% (lower than the target of 4% for the whole year). Production and business were maintained despite the strong impact from the epidemic.
However, the very complicated developments of the Covid-19 epidemic in July had a significant impact on all aspects of the economy, especially the southern region. Affected by the pandemic, production, circulation of goods and consumption in this region has been disrupted and stalled; domestic and export purchasing power has decreased; and the lives of people in areas under blockades and social distancing, especially workers in industrial parks, freelance workers have been severely affected.
The supply chain of production and consumption has been stalled locally, goods circulation is difficult; many affected manufacturing and exporting businesses have had to delay or cancel orders; if the outbreak lasts for a long time, they may lose the market because their clients may change their supply chains.
The cabinet meeting on August 11. Photo: TTXVN
Regarding macroeconomics, the Minister said that inflation may increase due to short-term supply and demand imbalance in the country and the increase of prices for goods and materials in the world. Vietnam’s consumer price index (CPI) in July was high (0.62%) and there is a risk of further increase in the next months if the epidemic continues.
Budget balancing may be difficult, while domestic revenue will decrease in heavily affected areas, and the central budget may have to increase spending on epidemic prevention and control.
Exports have slowed down, exports in July alone decreased by 0.8% over the same period last year. The trade deficit in seven months increased to 2.7 billion USD. Credit and bad debt risks are likely to increase in the last months of the year.
The number of newly established enterprises in July decreased by 33.8% year on year, while the number of enterprises withdrawing from the market increased by 24.6%, with 30% of the total in Ho Chi Minh City. Nearly 12.8 million workers lost their jobs, or had their working hours and income reduced.
The Minister said that the growth potential of the third quarter is not much. The ability to achieve the growth target of 2021 from 6-6.5% is getting harder due to the impact of the Covid-19 epidemic.
Therefore, in the coming time, strengthening measures for disease prevention, control and protecting people's health and lives is a top priority. At the same time, it is necessary to implement mechanisms, policies and solutions to support people, workers and businesses to overcome difficulties, and be ready to resume production and business after the pandemic; and urgently remove bottlenecks of the economy and free up resources for development.
The health crisis is becoming increasingly complex and expected to continue drawing a grey economic picture in the region.