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The economy has recovered with some positive results
Discussing at the meeting, Government members commented that although there are many difficulties, the socio-economic situation in July 2023 and the past seven months continued to remain stable, inflation is controlled, and major balances are secured.
Specifically, inflation continued its downward trend. The average CPI in the first seven months of 2023 increased by 3.12% over the same period last year (the average for six months increased by 3.29%; five months increased by 3.55%; four months increased by 3.84%; 3 months increased 4.18%; two months increased 4.6%, and 4.89% increase in January). The monetary and securities markets was generally stable with a positive recovery trend, and interest rates continued to decrease; major fields and sectors had good recovery; and investment achieved positive results.
The business development has showed more positive signals. In July, there were 13,700 newly registered businesses, up 4.3% in number of businesses and 2.4% in registered capital over the same period. Generally, in seven months, there were 131,900 businesses entering or re-entering the market, higher than the number of businesses withdrawing from the market of 113,300... In the context of the general difficulties the world is experiencing, these are positive results.
Besides the results achieved, the Government members also candidly acknowledged the shortcomings as well as the difficulties and challenges which need to be confronted and addressed, among which are: the stabilization of the macro-economic situation, potential risks in major balances, the fact that inflation tended to decrease but is still under pressures.
Additionally, other problems include: a high bad debt ratio on the balance sheet, low credit growth, and the economy's weak capital absorption. The monetary policy management faced many difficulties in the context that many countries continued to tighten monetary policy; the business sector continued to face difficulties, especially in terms of declining orders; and the manufacturing industries recovered slowly.
The corporate bond market and real estate market still faced many difficulties and problems; the livelihood of a part of the citizenry was still difficult, etc..
Continuing to reduce interest rates, accelerating the implementation of the 120 trillion VND package
In his concluding remarks, Prime Minister Pham Minh Chinh said that the complicated and unpredictable global situation, weak consumer demand, increased protectionist barriers, inflation remains at a high level, and many countries continue to maintain tight monetary policies (i.e., Fed and ECB continue to raise interest rates), new arisen risks and challenges on food security, and rising oil prices at the highest level since April 2023, etc. has caused many objective limitations and difficulties
However, according to the Prime Minister, there are subjective causes such as a number of ministries, branches, and localities were still passive and did not act intensively, coordinate effectively when performing their functions and tasks; the reception of people and business's opinions and handling of their difficulties lacked in intensity, timeliness, and effectiveness.
After analyzing the domestic, regional, and international situation, the Prime Minister emphasized the need to be persistent, consistent, and focused on achieving the specified overall goals, continuing to maintain macroeconomic stability, controlling inflation, promoting growth, maintaining large balances and public debt, government debt, and overspending. According to the Prime Minister, in the last six months of the year, the economy's growth rate must reach 9%. Achieving this goal requires great efforts from all government levels and sectors.
Regarding the focus of executive direction in August and the last months of 2023, the Prime Minister especially remarked six major contents and solutions:
Ensuring a reasonable balance and harmony between interest rates and exchange rates;
Prioritizing promoting growth, especially on the three main drivers: consumption, investment, and export;
Ensuring proactive, flexible, and effective monetary policy, continuing to have appropriate solutions such as lowering interest rates, especially lending rates, restructuring debt, delaying debt, increasing credit, and increasing the money supply in an appropriate way;
Ensuring an expansionary and focused fiscal policy, continuing to reduce and extend taxes, fees and charges; accelerating tax refund and public investment disbursement;
Ensuring national monetary and financial security;
Shortening the process and procedures; developing institutional and legal documents.
The Prime Minister directed the SBV to assume the main responsibility, and coordinate with government agencies, and localities, to continue to ensure the implementation of a proactive, timely, flexible, innovative, focused, suitable, and effective monetary policy; coordinating synchronously, closely, and harmoniously with fiscal and other policies to promote strong growth and remove difficulties for businesses; stabilizing the foreign currency market; manage the exchange rate in accordance with the situation.
Timely and effectively implementing policies on loan extension, suspension, and restructure; directing intensively to reduce interest rate levels, especially the lending rates; increasing capital supply and credit appropriately in association with improving financial inclusion, focusing on production and business, priority areas, growth drivers of consumption, investment, and exports.
Managing credit with a focus on business sectors, prioritized areas, and growth drivers associated with credit quality assurance and system safety; Coordinating with the Ministry of Construction to promote the implementation of a credit package of 120 trillion VND for social housing loans, ensuring timeliness, convenience, smoothness, flexibility, and feasibility; report to the Prime Minister on a quarterly basis on implementation results.
The Prime Minister inquired ministries and local government agencies to focus on removing difficulties for businesses, giving priority to growth promotion, job creation, and people’s livelihoods associated with macroeconomic stability, inflation control, and the assurance of major balances of the economy.
Focusing on enhancing the economy's production capacity, drastically promoting administrative procedures reforms, improving the business environment, conducting decentralization and delegation, strengthening the application of science, technology, and innovation, improving the human resources quality, building infrastructure, promoting digital transformation, developing the digital economy, green economy, circular economy and implementing Project No.06.
