The monthly meeting of the Government was held on July 31st under the chairmanship of Prime Minister Nguyen Xuan Phuc to discuss on the institutional improvements and the socio-economic development.
According to the Ministry of Planning and Investment’s report, the socio-economic situations have remained in positive trends; the macroeconomy has been stable, the inflation has been under a manageable range in the context that the world’s situations have been changing a lot amd the intensifying trade conflicts between the US and China. By now, basically there has been no big impact on the domestic trade, the forex market and foreign exchange rates have gone through some changes, but have been managed and adjusted by the SBV in a timely manner.
In July the Consumer Price Index (CPI) slightly decreased by 0.09% as compared to the previous month after two consecutive months of relatively high increases. The average growth of CPI in the 7 months of 2018 rose by 3.45% and the average core inflation rate increased by 1.36% as compared to the same period of the previous year.
As of July 20, the credit growth rose by 7.69% and has sufficiently met the demands for capital of the economy. The interest rates were stable as compared to end of June 2018. The foreign exchange rate in interbank market was on an upward trend due to the pressure of trade conflicts between the US and China, the Chinese Yuan depreciation and the US Dollar appreciation. Nonetheless, the SBV has conducted appropriate interventions in conjunction with the macroeconomic management in order to stabilize the forex supply and demand, and ensure the liquidity of the forex market.
The total registered Foreign Direct Investment (FDI) was estimated at US$23 billion, up by 4.6% and the FDI disbursement exceeded US$9.8 billion, an increase by 8.8% as compared to the same period of last year.
Despite the decrease in the number of new firms in July (the reduction was about 3.5%), the registered capital of newly-established enterprises picked up by 29%.
The Index of Industrial Production (IIP) growth in July witnessed a sharp increase of 14.3% against the same period of last year. Remarkably, the trade surplus in seven months reached US$3.1 billion, equivalent to 2.3% of the total export value.
In his conclusions at the conference, the Prime Minister affirmed that the macroeconomic conditions have continued to be stable; the four main targets of the macroeconomic management, i.e. the GDP growth, prices stabilization, job creation and unemployment reduction, and trade surplus, have been ensured. The unemployment rate was at 2.2%, the lowest level for several recent years
However, the Prime Minister also stated that the economy is still facing numerous difficulties and risks in the short term, such as trade and monetary risks, and capital flow risks… especially in the context of the trade conflicts between the US and China, the complication development of natural disasters which have badly affected the domestic production and people’s lives.
In order to maintain the momentum of the economic growth for the remaining of 2018 and 2019, the Prime Minister requested the ministers and government members to decisively implement the tasks of their ministries and agencies, especially the tasks of improving the institutional system to unlock the constraints and stagnations which may hinder the economic development.
The Prime Minister affirmed that the Government would not change the applicable policies and measures of the economic and fiscal management in 2018, including such important policies as the environment tax on oil and gasoline products, the VAT reforms. The Government will not adjust the prices of several public commodities and services such as electricity, and will control strictly the prices of healthcare services. He also stressed that it was very crucial to stabilize the exchange rates so that Government could continue to maintain the monetary policy targets as defined from the beginning of 2018. The Government will not take any advance actions in forestalling the international financial market changes as recommended by some people, before there are concrete impacts.
MH