Transcript CPI & TRADE SITUATION OF VIETNAM 2012

INFLATION CONTROL
OF VIETNAM 2012
Ms. Busaba Butrat
Thai Trade Center Hanoi
May 2012
Key indicators For 2011 & Targets for
2012
Indicators
2011
Targets for 2012
GDP (%)
5.89%
6.0- 6.5%
122
135
Export (US$ billion)
96.90
99.7 – 107.4
Import ( US$ billion)
106.75
111.7 – 119.8
CPI (%)
18.58
Under 10%
Real GDP (US$ billion)
• One of the “hot” problem affected to Trade and
investment of Vietnam is Inflation rate which has been
starting since 2011 & shown by a high Consumer Price
Index (CPI) of 18.58% for the whole year.
• Vietnam has entered the year 2012 with the same
problem of Inflation threat so one of the main targets set
by the government is to control the CPI with one digit
(under 10%) for the year of 2012.
Factors may lead to the high CPI in the
beginning of 2012
Internal factors:
• Uncertainty of the development;
• Lack of competitive ability of enterprises in the
markets;
• Difficulties in production due to the increase of cost
and international competition;
• Bad debt & low effects of the banking and financial
system operation…
External factors:
• Recession of the global economy and public debt;
• Tendency of using non- tariff barriers from a number
of big markets such as America, EU, Japan, etc…
• Pressures of high inflation increasing globally, etc…
Measures to manage CPI
•
implementation of strict measures to tighten money
supply and credit growth, and enhance the
management of state budget spending and public
investment is the main reason for the CPI slowdown;
•
decrease in the purchasing power of the domestic
market, while bumper crops have effectively reduced
the prices of agricultural products and foodstuffs;
• strict implementation of measures to strengthen
market and price management, has also contributed
to reducing the CPI growth rate;
• carry out tight and cautious monetary policy toward
ensuring the proactive flexibility and harmony
between monetary policy and fiscal year policy to curb
inflation in 2012 at about 8 to 9 percent.
CPI in the down trend
CPI for 2011 & the first 4 months 2012
Results for the 1st four months 2012
Indicators
1st quarter
2012
End of
April
2012
Increased rate of GDP
+4.0%
N/A
Increased of rate of agricultural, forestry and fishery ‘s GO
+3.7%
N/A
Increased rate of Industrial Index production (IIP)
+4.1%
+4.3%
Total increased retail sales of goods and services
+21.8%
+21.6%
Increased rate of total export turnover
+23.6%
+22.1%
Increased rate of total import turnover
+6.9%
+4.4%
+24.5%
+22.9%
19.%
27.8%
+15.95%
+14.57%
Increased rate of foreign visitors
Increased rate of investments under State Budget
compared with yearly plan 2012
Increased rate of CPI of the first quarter 2012 compared
with the same period of time in 2011
Trade for the first
4 months 2012
1st quarter
2012
Compared with
the same
period of 2011
End of April
2012
Compared
with the same
period of 2011
Export
24.5 US$ billion
+23.6%
33.4 US$ billion
+22.1%
Import
24.8 US$ billion
+6.9%
33.6 US$ billion
+4.4%
Trade
Surplus
251 US$ million
1.0% of total
export turnover
176 US$ million
0.5 % of total
export turnover
• Export increased more than Import for
the first 4 months leading to the low
rates of trade deficit with 1.0 % and
0.5% of the total export turnover for by
the end of March and April respectively.
Single digit CPI: Gains & Risks
Gains:
• Control Inflation rate to
guarantee the living cost;
• Stabilize the macro – economy;
• Promote for export;
• Control the budget surplus
with the reasonable rates;
• Reduce the trade surplus rates;
One digit CPI: Gains & Risks
Risks:
. Low demand in consuming leading
to the recession of production of
the economy;
. Number of enterprises halted
operations and bad debt rose;
. Import declines while the
production of most heavy
industries rely on imported
materials;
. GDP is at the modest level;
Current Difficulties and solutions
Difficulties
• Banking interest fell but remained
high;
• Enterprises struggled to absorb
capital while the bank cannot lend;
• The rate of industrial growth is lower
than the same period last year;
• Purchase Power decreases sharply;
• Investment decreases especially from
the foreign investment sources;
• Living conditions fell into difficulties;
• Import decline significantly;
Current Difficulties and solutions
Solutions
. Continue trying to control inflation by lowering
CPI under 10% for the whole year;
. Continue to lower the interest rates;
. Offer supports to ease difficulties for
enterprises particularly small and medium
sized business;
. Priorities to the groups of businesses to
promote for export and balance import to
have good serve for production;
. Accelerating the restructuring of the banking
and financial sectors as well as the
economy toward industrialization;
Thank You !