VietNamNet Bridge - This year’s economic growth is very difficult with clearer indicators on the decline, while policy efforts and outcomes are not enough to turn the situation, according to the National Assembly (NA) Economic Committee's report.

Worry and concern are the feeling that is seen most clearly in the report of the NA Economic Committee that was presented to the NA Standing Committee on May 14.

Noting the efforts of the government and the positive results achieved initially, most of the committee’s members said that there are indicators showing more clearly the decline. The gross domestic product (GDP) in the first quarter rose 4.89 percent compared to 4.75 percent of the same period last year, but it is still much lower than that of the corresponding period of 2011 and 2010. The growth rate of industrial production was only 4.93 percent during this period, the lowest in the past four years.

"Growth in outstanding credit in the first quarter was only 0.03 percent and 1.4 percent in the first four months of the year; the index of industrial production (IIP) rose 4.9 percent in the first quarter, lower than the same period in 2012 (5.9 percent,) reflecting the absorption of capital and production capacity of the economy has been seriously affected," the report said.

Decline in total social investment is also the problem that the NA Economic Committee concerned. Total investment of the whole society in real price increased by 5.5 percent compared to the same period last year, but if the price factor is excluded, it decreased. The rate of social capital investment/GDP reached 29.6 percent of GDP, much lower than the same period last year (36.2 percent). According to the committee’s members, together with the standstill of FDI and the low increase of credit for the economy, the resources for growth in 2013 are very difficult.

In the first three months of this year, enterprises faced more difficulties in production and business. The number of newly established enterprises was 15,700, down by 6.8 percent in the number and 16.1 percent in registered capital compared to the same period of 2012. The number of businesses that was dissolved and shut down was 15,300, an increase of 14.6 percent.

Export is considered one of the few bright spots of the first four months of this year. The four months export turnover reached $39.46 billion, up 17.5 percent, but in April alone, the value of exports fell 12.1 percent from the previous month, while export of the domestic sector plummeted by 20 percent.

The report also pointed out the delay in the implementation of the master plan for restructuring the economy. Some members said that it will be difficult to successfully carry out the overall scheme because it will depend on the implementation of sub-projects, which are assigned to many ministries and agencies.

The opinions made at the session of the NA Standing Committee on May 14 also clearly showed worries about the deterioration of the economy.

The Chairman of the NA Committee for Finance and Budget – Mr. Phung Quoc Hien noted the imbalance between the amount of saving money flowing into banks and the money flowing into the economy. According to this committee, to have 1 percent of GDP growth, credit must increase at least 2-3 percent. However, after four months, credit rose by 1.44 percent only. So many deputies said that it is difficult to reach 5.5 percent growth this year.

Mr. Phan Trung Ly - Chairman of the NA Legal Committee - said that the government should focus on financial and monetary solutions in order to facilitate businesses to access to capital. According to him, the government's measures mainly concentrate on tax and duty reduction and exemptions. National Assembly Chairman Nguyen Sinh Hung said that in this situation, businesses do not have income or development so they have nothing to be exempted.

Hung expressed his dissatisfaction with the report of the Government and the verification report of the NA. He asked to address inventory and bad debt from now to later this year.

Vice President Nguyen Thi Doan spent a lot of time sharing concerns over poor economic management, especially management of foreign direct investment (FDI). She worried of the economy’s dependence on FDI. She said that it is unacceptable that some FDI firms develop production but reporting losses and not paying taxes. She requested to specify who is responsible for this.

Given that the overall economic situation "is deteriorating," Vice President Doan asked the NA to focus on financial and monetary solutions at the upcoming season because credit is "almost frozen".

The NA Economic Committee said that the task in the remaining months of 2013 is extremely heavy. The challenge is to handle and ensure harmonized implementation of the both targets of economic growth and inflation control.

S. Tung