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Vietnam Today

Government: 6.7% GDP growth remains a challenge

Released at: 14:18, 05/05/2017

Government: 6.7% GDP growth remains a challenge

Photo: VGP

Higher growth in remaining quarters must be facilitated for annual target to be met.

by Duy Anh

Against a backdrop of 5.1 per cent GDP growth during the first quarter of this year, Minister and Chairman of the Office of the Government Mai Tien Dung detailed specific solutions to push Vietnam towards its target of 6.7 per cent for 2017.

“Our economic growth scenario until end-2017 will be 6.26 per cent in the second quarter, 7.29 per cent in third quarter, and 7.49 per cent in the fourth quarter,” he told  the government’s regular press conference  on May 4. “This will bring the cumulative GDP growth rate over the final three quarters of the year to 7.1 per cent.”

In a move to boost GDP, Minister Dung touched on the exploitation of crude oil, which fell 13.6 per cent during the first quarter. Prime Minister Nguyen Xuan Phuc authorized the Ministry of Industry and Trade (MoIT) to handle the matter as it is key to enhancing growth.

The PM also authorized the Minister of Industry and Trade to cooperate with other ministries and authorities to fully handle 12 loss-making projects, hastening construction progress at key national projects.

“From the government’s standpoint, the 12 loss-making projects will have to be handled under market mechanisms,” Minister Dung said. “The Prime Minister earlier formed a task force, led by Deputy Prime Minister Vuong Dinh Hue and consisting of ministers and officials from other ministries, to provide solutions and scenarios for each specific project.”

The 12 slow-moving, loss-making and inefficient projects managed by MoIT include four fertilizer plants, three bio-fuel production projects, two steel production projects, the Dinh Vu polyester fiber factory, the Dung Quat Shipbuilding Industry Company Limited, and the Phuong Nam paper pulp mill.

Six active projects are running at a loss, three have been put on hold because of rising costs and a lack of operating capital, while the other three have ceased production due to exorbitant costs and major losses.

Total initial investment in these projects was some VND43.67 trillion ($1.92 billion), which was later adjusted to VND63.61 trillion ($2.7 billion). Of this, VND14.35 trillion ($630.8 million) was equity, with loans amounting to VND47.45 trillion ($2.1 billion) and the remainder coming from other sources.

Accumulated losses of the ten projects that are operational or had ceased production as at end-2016 total over VND16.12 trillion ($708.6 million), with liabilities of more than VND55.06 trillion ($2.42 billion).

Total disbursed capital of the three incomplete projects is around VND8.61 trillion ($378.5 million) of the estimated VND13.06 trillion ($574.1 million).

Minister Dung emphasized the government’s determination to handle these loss-making projects. Those that need to declare bankruptcy will be allowed to do so, while those that need to be sold to either domestic or international investor will be sold. Finally, those that are considered capable of recovering will begin manufacturing and operations once more.

To express its determination to achieve the GDP target, the government will end holding breaking ground ceremonies for all projects, Minister Dung said.

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