Monday, 16 Jul 2018
SOCIAL AFFAIR

Labor productivity, institutional reforms spur economic growth

Updated at Sunday, 13 May 2018, 18:30
The Hanoitimes - The government should give top priorities on increasing labor productivity and improving institutions to ensure high and sustained economic growth, according to the National Financial Supervisory Commission (NFSC).
Under a recent report updating the economic and financial situation in April 2018 released recently, NFSC said that in the short term, economic growth is being supported by the recovery trend of the economy and the government’s policies to improve business environment.
 
The domestic business production was positive in April.
The domestic business production was positive in April.
But in the middle and long run, the country needs further institutional reform to improve economic growth. The report made positive assessments on the domestic business production in April, which has been the case since the beginning of this year.
It said business conditions in 2018 will be underpinned by a number of favorable factors, notably the 29-month improvement of the Manufacturing Purchasing Managers’ Index (PMI). The average consumer price index (CPI) in the first four months of 2018 increased 2.8 percent over the same period last year while core inflation was maintained at a stable level, up 1.34 percent.
The report said if strict control is not taken for the roadmap for adjusting up the prices of public services, the CPI growth this year may be higher than the pace in 2017. The CPI rise was mainly driven by the hikes in prices of healthcare services (up 16.76 percent), transport (up 5.64 percent), and accommodation and construction material (3.38 percent). 
In the period, more than VND46 trillion (US$2 billion) from government bonds were mobilized, equivalent to 23.01 percent of the yearly target, the report said, noting a strong drop in the rate of successful bidding from 66.2 percent in March to 37.5 percent in April.
On the stock market, despite downward adjustments in April following hot growth in the first quarter, there are good signs of foreign investment flow. Since the beginning of 2018, net purchase of shares by foreign investors came to US$590 million while the value for bonds was US$62 million. 
They have actively participated in initial public offering (IPO) and share sales of large private companies such as Techcombank, Vinhomes, and Vingroup. 
This showed the confidence of foreign investors in the development prospects of the private economic sector in Vietnam.
However, the committee still recommended that measures should be taken to deal with the recent decline of the capital investment inflow, especially indirect investment capital.
As for State budget, the first four months of this year saw total revenue of the State budget to reach VND446.3 trillion (US$19.57 billion), equivalent to 33.8 percent of the yearly estimate and up 12.1 percent year-on-year.
Domestic revenue, estimated at VND368.1 trillion ($16.14 billion), rose by 14.5 percent from the same period last year. The figure was equal to 33.3 percent of the estimate. Meanwhile, revenue from crude oil surged 27 percent year on year to VND19.1 trillion ($837.5 million), accounting for 53.3 percent of the estimate. 
In the reviewed period, State budget spending stood at VND410 trillion ($17.97 billion), or 26.9 percent of the yearly estimate, up 4.6 percent annually.
Debt ratios were within the limit of the National Assembly, with public debt equal to about 55.9 percent of the gross domestic product (GDP), government debt about 47.4 percent, and government-guaranteed debt nearly 8 percent. 
To ensure sustainable budget balance, NFSC suggested continuing to cut regular expenditures, balancing the collection and expenditure for social insurance and building mechanism to encourage more people to join voluntary social insurance, and adjusting the law on public investment to attract buyers of government bonds.
Thao Le
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