Second quarter economic growth approximates 6.17 percent, expert forecasts

Second quarter economic growth this year is estimated to approximate 6.17 percent and inflation may increase by 0.73 percent over the first quarter, forecast head of the Central Economic Management Institute Dr. Nguyen Dinh Cung at a seminar in Hanoi yesterday.

He said that second quarter export growth would reach 8.02 percent compared to the same period last year however trade deficit would cause a current account deficit in the balance of payment which is expected to reach US$420 million.

At the seminar, Mr. cung more stressed the importance of growth quality than growth rate.
He suggested policymakers to pay special heed to the possibility that the Federal Reserve might hike interest rate in the second quarter, and intensify informing businesses about the Trans-Pacific Partnership and other free trade agreements although these agreements will not bring significant changes in the second quarter.

Notably, he pointed out his view of ‘revenue reduction-spending cut’ and urged the Government to continue stabilizing macroeconomics, stop raising fees and taxes not only this year but also in the next five years and review and remove unnecessary items of expenditures to avoid waste.

State assets should be auctioned publicly. State owned enterprises including profitable ones in fields that the Government does not need to hold dominant share should stop providing aid for under performance enterprises, he proposed.

In addition, the Government should reconsider the policy of zero percent interest rate for US dollar deposits at current time to prevent foreign currency from running abroad while the economy is facing shortage of capital.

By Anh Phuong – Translated by Hai Mien

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