Clearly identify challenges to achieving goals

Discussing the additional assessment of the results of the implementation of the socio-economic development plan and state budget in 2023; the implementation of the socio-economic development plan and state budget in the first months of 2024, National Assembly deputies pointed out shortcomings and limitations and proposed to more clearly identify challenges to have appropriate directions and management, contributing to the completion of the growth target and socio-economic and state budget targets in 2024...

Concerns about the risk of inflation

Regarding economic growth, delegate Ha Sy Dong (Quang Tri) and many other delegates said that the Government's report emphasized that GDP growth in the first quarter reached 5.56%, the highest in the period from 2020 to present. This is also the basis for the Ministry of Planning and Investment to propose maintaining the scenario that the GDP growth rate for the whole year will reach about 6-6.5%. Delegates said that this is a very cautious proposal when looking at the challenges of the economy, especially the difficulties of businesses.

Also according to delegate Ha Sy Dong, in the first 4 months of the year, we recorded 86,400 enterprises withdrawing from the market, an average of over 21,600 enterprises withdrawing from the market each month. Updated data shows that in May, the business registration situation changed positively, but in the whole 5 months, the number of enterprises withdrawing from the market was 97,299 thousand enterprises, an increase of 10.5%; while the number of enterprises entering and re-entering the market increased by only 4.1% compared to the same period last year.

“This is an issue that I think needs special attention. We still say that when businesses develop, the country develops, but with the above-mentioned figures, what should we do when businesses are facing difficulties?”, delegate Ha Sy Dong raised the issue, at the same time suggesting more detailed analysis and assessment to have timely decisions at this session to remove obstacles and support business operations.

Another issue that many delegates were concerned about was that the state budget revenue increased more strongly than expenditure, helping the budget balance to have a large surplus of nearly 30,000 billion VND in the first 4 months of the year. This achievement has helped fiscal policy have more room to expand support for the economy. However, looking at it from another perspective, this result means that a large amount of money from businesses and people has been mobilized and withdrawn from the economy and has not been redistributed back in time. This is an important reason why the capital mobilization growth of the banking system is lower, even negative, reaching negative 1.1% by the end of April compared to the beginning of the year, compared to the credit growth of the whole industry reaching positive 1.9% by the end of April compared to the beginning of the year. Therefore, the target of 15% credit growth for 2024 is quite challenging.

Another issue that many delegates expressed concerns about was the risk of inflation in the coming time, when by the end of April, the consumer price index (CPI) had increased by 4.4% compared to the same period last year and the average increase in the first 4 months was 3.93% compared to the same period. The pressure of inflation at the end of the year is increasing due to a number of factors such as the uncertain world commodity prices, the potential for increased risks when geopolitical conflicts are at a peak and the increase in minimum wages from July 1st causing prices to increase accordingly...

Emphasizing more on the monetary factor that can cause inflation risks, opinions said that when we have a long time to pursue expansionary fiscal policy and loose monetary policy to support economic recovery and development. Once consumer demand increases again, the problem of demand-pull inflation will be clearly demonstrated similar to what developed economies have experienced in the post-COVID period. In addition, the expected inflation factor has also been ignited when the gold exchange rate and real estate prices in the apartment segment in some large cities are fluctuating strongly. Therefore, delegates suggested that in addition to prioritizing growth promotion, inflation control should be given special attention in the coming time.

Strengthening the role of fiscal policies

Considering that the most prominent difficulty in the business operations of enterprises is the output market when there is a lack of orders from the international market, delegate Nguyen Viet Ha (Tuyen Quang) said that among the main factors affecting the production and business of processing and manufacturing enterprises in the first quarter of 2024, the factor of low domestic market demand accounts for 55.1%; the factor of low international market demand accounts for 34.2%. The lack of orders that has lasted from 2023 to now has forced enterprises to reduce production, cut labor, and even dissolve because they are no longer able to withstand it.

Another difficulty of the economy is that domestic consumer demand is increasing at a low level. On average, in the first 4 months of 2024, total retail sales of goods and consumer service revenue at current prices are estimated to increase by about 8.5% over the same period last year, while in the same period in 2023 it increased by 13.3%. Excluding the price increase factor, it increased by 5.3%, compared to 8.7% in the same period last year.

To facilitate businesses to recover production and support consumer demand, bank interest rates have continuously decreased and remained low. Banks are currently continuing to reduce lending rates and improve service quality to attract customers in order to increase credit growth. Incentive programs are also focused on the production and consumption activities of businesses and people.

However, due to difficulties in the output market, enterprises have reduced their production scale. In investment, people are cautious and save on spending, leading to a lack of demand for loans. This is a major reason why credit growth is difficult and also reflects the low capital absorption of the economy.

To contribute to solving the above difficulties, delegates recommended that the Government pay attention to creating a diverse and sustainable export market for businesses, while diversifying and improving the quality of export products, and effectively exploiting the free trade agreements that Vietnam has signed. In addition, it is necessary to implement policies to maximize the internal strength of the domestic market, including strengthening the role of fiscal policies such as continuing to exempt, reduce, and extend taxes, fees, and land use fees; implementing domestic market trade promotion programs, promoting the distribution of goods through digital platforms and e-commerce to expand the domestic consumption market; launching the movement of Vietnamese people giving priority to using Vietnamese goods... Continuing to improve the legal system, reform and reform administrative procedures towards creating an open, healthy, and favorable business environment for businesses.

In addition, the Government also needs to resolve difficulties in the stock market and bond market to expand capital supply to businesses, gradually limiting dependence on bank credit channels, because if the credit capital/GDP ratio remains high as it is now, it will pose potential risks to the economy as well as the operations of the banking system.

Through the socio-economic situation in the first months of 2024, other delegates also requested the Government to closely follow the developments of the domestic and international economic and political situation, improve the capacity to analyze, forecast, and respond to policies promptly and effectively, ensure major balances of the economy, control inflation, and prevent shocks from affecting people's lives.

At the same time, effectively implement salary reform, ensure unity, fairness, and achieve the goal of increasing income for workers. Continue to pay attention to the fields of culture, education, vocational training, health care, environmental protection, climate change response, natural disaster prevention, etc.

Source: https://thoibaonganhang.vn/nhan-dien-ro-thach-thuc-de-hoan-thanh-cac-muc-tieu-152207.html