Econ
PM instructed to speed up public investment progress
At the government monthly meeting of July, the Prime Minister instructed speeding up the public investment progress.
The progress of projects financed by the state budget in the first 7 months showed that the capital committing to investment projects has increased through months (for the first two months, it was approx. 14 trillion VND, or equivalent to 620 million USD on average).
As such, the investment capital in the following months is 757 million USD in March, 910 million USD in April, 1,01 billion USD in May and 1,1 billion USD in June, making the average investment capital in the first 6 months of 836 million USD. July has been the month with highest capital execution with 1,13 billion USD. However, the execution of provincial budget is low, while the execution of state budget is even lower.
Another factor influencing the Prime Minister request is the target to achieve the GDP growth of 6.7% for 2017 with the investment of 5.3 times larger than 2016 (already lower than the average investment of 5.4 times during the period of 2011-2015, and significantly lower than the percentage of 6.2 times in the period of 2006-2010). As a result, the growth percentage on investment over the GPD of 2017 will be over 35.5%. During the government’s monthly meeting in July, the Prime Minister has set the target for this number of 34-35%, a higher rate compared with the government resolution on the execution of 2017 plan of 31.5%.
At the same time, the Prime Minister also has specific instructions on public investment and industrial production to concerned ministries and agencies. Specifically, Ministry of Planning & Investment is requested to finalize the public investment plan as soon as possible and propose measures to increase the disbursement progress of projects financed by state budget. The ministry also has to review andmake effort in removing obsolete business barriers and conditions.
The State bank of Vietnam (SBV) continues maintaining the monetary policy in the direction of reducing the interest rate and increasing lending to around 20%. This is the highest rate since 2011 (14.2% increase in 2011, 8.85% in 2012, 12.5% in 2013, 14.16% in 2014, 18% in 2015, and 18.71% in 2016). This growth rate is considered appropriate in the context of economic development condition in the first 7 months and for the whole year. Consumer price index (CPI) after 7 months increased 0.31% (far lower than 2.48% of the same period in 2016), and CPI for 2017 is forecasted to be lower than that of 2016 (4.74%), but higher than the previous two years (2014 of 1.84% and 2015 of 0.6%). The average CPI in the first 7 months (3.91%) is higher than the same period of last year (1.82%), however is forcasted to be lower than the target number of 4%. The average Inflation rate for the first 7 months is also lower in comparison with the same period of last year (1.49% and 1.81% respectively). The foreign exchange rate after 7 months has slightly decreased (0.03%), while the average number in 7 months is also lower than the same period of last year (1.45% and 3.67% respectively).
As such, the investment capital in the following months is 757 million USD in March, 910 million USD in April, 1,01 billion USD in May and 1,1 billion USD in June, making the average investment capital in the first 6 months of 836 million USD. July has been the month with highest capital execution with 1,13 billion USD. However, the execution of provincial budget is low, while the execution of state budget is even lower.
Another factor influencing the Prime Minister request is the target to achieve the GDP growth of 6.7% for 2017 with the investment of 5.3 times larger than 2016 (already lower than the average investment of 5.4 times during the period of 2011-2015, and significantly lower than the percentage of 6.2 times in the period of 2006-2010). As a result, the growth percentage on investment over the GPD of 2017 will be over 35.5%. During the government’s monthly meeting in July, the Prime Minister has set the target for this number of 34-35%, a higher rate compared with the government resolution on the execution of 2017 plan of 31.5%.
At the same time, the Prime Minister also has specific instructions on public investment and industrial production to concerned ministries and agencies. Specifically, Ministry of Planning & Investment is requested to finalize the public investment plan as soon as possible and propose measures to increase the disbursement progress of projects financed by state budget. The ministry also has to review andmake effort in removing obsolete business barriers and conditions.
The State bank of Vietnam (SBV) continues maintaining the monetary policy in the direction of reducing the interest rate and increasing lending to around 20%. This is the highest rate since 2011 (14.2% increase in 2011, 8.85% in 2012, 12.5% in 2013, 14.16% in 2014, 18% in 2015, and 18.71% in 2016). This growth rate is considered appropriate in the context of economic development condition in the first 7 months and for the whole year. Consumer price index (CPI) after 7 months increased 0.31% (far lower than 2.48% of the same period in 2016), and CPI for 2017 is forecasted to be lower than that of 2016 (4.74%), but higher than the previous two years (2014 of 1.84% and 2015 of 0.6%). The average CPI in the first 7 months (3.91%) is higher than the same period of last year (1.82%), however is forcasted to be lower than the target number of 4%. The average Inflation rate for the first 7 months is also lower in comparison with the same period of last year (1.49% and 1.81% respectively). The foreign exchange rate after 7 months has slightly decreased (0.03%), while the average number in 7 months is also lower than the same period of last year (1.45% and 3.67% respectively).
