Source: Xinhua 2016-07-29 18:30:16
HANOI, July 29 (Xinhua) -- Vietnamese Prime Minister Nguyen Xuan Phuc said Friday that his government will strive to reach the highest possible socio-economic growth in 2016, while not mentioning the target of 6.7 percent of Gross Domestic Product (GDP) growth set earlier.
In a report on socio-economic situation in the first six months of 2016 as well as major tasks and measures in the six remaining months of the year, Phuc said amid the context of many difficulties and challenges, the duty of the government is very heavy.
In the remaining months of 2016, the government will focus on macro-economic stabilization in order to set foundation for sustainable growth, promote strategic sectors in association with economic restructuring, remove barrier for business development, promote entrepreneurship startup and innovation.
Phuc said the government will actively and flexibly manage fiscal and monetary policies, control inflation, reduce interest rates, restructure credit system, and handle bad debt, among others.
The government will act drastically to overcome shortcomings and weaknesses to strive to reach the highest possible level of the socio-economic development plan in 2016, thus creating favorable conditions for successful implementation of the Resolution of Communist Party of Vietnam's 12th plenary as well as the five-year plan in 2016-2020, the Vietnamese cabinet chief said in the report.
Among the difficulties for the country's socio-economic development mentioned in the report, it is the high rate of public debt and payment pressure.
According to the report, as of the end of 2015, public debt was equivalent to 62.2 percent of GDP, while government debt reached 50.3 percent (exceeding the ceiling of 50 percent), and foreign debt was 43.1 percent.
"In case of the yearly target for 2016 fails to reach, these rates are expected to increase higher," reads the report.
Budget deficit has kept increasing in the past years, resulting from the imbalance in budget expenditure. The rate of spending for investment decreased from 28 percent in 2006-2010 period to 23.4 percent in 2011-2015 period, while recurrent spending increased from 55 percent to 65 percent in the review periods.
The handling of bad debt remained ineffective as so far, the state-owned Vietnam Asset Management Company (VAMC) which is established to deal with bad debts, handled only 13.4 percent of the bad debt it purchased.
The development of capital, securities and real estate markets remains unsustainable and is hindering risks. Meanwhile, the operation of state-owned enterprises (SOEs) remained inefficient with many difficulties, and the restructure and equitization of SOEs were slow, according to the report.
The management on environment and natural resources is still limited with a series of serious incidents, including the mass fish deaths in central region, deforestation, drought and saline intrusion in central highlands and southern Mekong delta.
The slow economic growth of 5.52 percent in the first half of 2016 put pressure on realizing the target of 6.7 percent, which Nguyen Duc Thanh, President of Vietnam Institute for Economic and Policy Research called it "very ambitious and hard to realize."
The World Bank has recently lowered its forecast for Vietnam's GDP growth to 6 percent in 2016.