VietNamNet Bridge – The National Financial Supervision Committee has forecast that Vietnam’s inflation rate in 2013 will be controlled at less than 7 percent.

The committee cited the high economic growth in the first quarter as a positive sign that should create a foundation for successfully achieving the country’s 2013 economic development goals.

If the domestic market does not see strong fluctuations in the following three quarters, the 5.3 percent GDP growth target will be within reach, it said.

However, the committee warned the national economy is still experiencing numerous difficulties, such as weak production capacity and low consumer demands.

Export revenues, which are considered a key factor in boosting economic growth, are predicted to decline in 2013 due to falling prices for Vietnamese exports on the global market.

In addition, the credit growth in the past quarter was very low.

Over the past ten years, the average inflation rate in the first quarter accounted for 40 percent of the entire year’s figure. Weighing up the advantages and disadvantages of the economy in 2013, committee experts predicted this year’s inflation rate will be kept below 7 percent.

Such a low rate may force deposit interest rates to go down to 7 percent, while the lending rate may drop to 10 percent.

The committee has proposed boosting production and offering more assistance to businesses in order to fulfill the year’s set target of achieving higher economic growth than in 2012.

It stressed the need to continue adjusting bank interest rates, settling bad debts and putting the Vietnam Asset Management Company (VAMC) into operation. Preferential interest rates should also be given to construction and real estate projects.

The committee also suggested considering value added tax (VAT), reducing the corporate income tax to 20 percent to encourage private investment and attract more foreign investment, as well as speeding up the disbursement of investment in State-funded projects.

Source: VOV