I. Achivements in the first six months

First, the country maintained a high economic growth rate, creating a premise for reaching or surpassing the growth rate set by the NA for the whole year. The nation recorded a GDP growth of 7.87% over the past six months, the highest record for the first half over the past five years. It attained a 16.9% increase in industrial production value, an almost 10% rise in added value, a 2.67% rise in agro-forestry and fisheries, and an 8.41% increase in services.

Secondly, Vietnam also gained a positive growth rate in export value thanks to successful outlet expansion. Export revenue in the first half of 2007 is estimated at more than US $22.45 billion, a 19.4% rise year on year, with six staples fetching more than US $1 billion. Markets have been expanded with the US, the European Union (EU) and Japan accounting for over 60% of the nation’s total six-month export turnover, year-on-year rises of 23 – 28%.

Thirdly, financial and budget activities continued to develop sustainably. The State budget income is estimated at more than VND 129.9 trillion (US $8.1 billion), a year-on-year hike of 13.7% over 2006 and equivalent to 26.3% of its GDP while expenditure from the State budget is estimated at over VND 163.7 trillion (US $10.2 billion), a year-on-year rise of 17.6%. The stock market saw a strong development over the past six months thanks to the Government’s management measures aiming to reduce risks for investors.

Fourthly, the country’s consumer price index (CPI) surged by 5.2% in the past six months, compared to 4% in the first half of 2006 but remained under control. The housing and construction materials recorded the highest increase of 8.24%, followed by the food and foodstuff group, up 6.8%. Other commodities rose by between 2.72 and 4.3%.

The CPI was affected by the world’s rising prices of petrol, steel, plastics, food and foodstuff. The government step-by-step wiped out price subsidies for petrol, electricity, coal, cement and steel while expanding total means of payment to increase the national foreign reserves.

Fifthly, the country’s social investment capital is estimated at VND 195 trillion (US $12.1 billion), representing a 43.2% of the yearly plan and accounting for 39.5% of GDP. Of the figure, VND 42.3 trillion (US $2.6 billion) came from the State budget; VND 27.7 trillion (US $1.7 billion) from State-owned enterprises, almost VND 34 trillion (US $2.1 billion) from foreign direct investment capital and VND 68 trillion (US $4.2 billion) from the private sector.

Sixthly, cultural and educational, healthcare, scientific and technological activities have been expanded nationwide. Job generation, poverty reduction and hunger elimination and epidemics prevention were intensified.

Seventhly, The administrative reform is making major progress with a number of solutions underway, focusing on procedures such as streamlining paperworks, clearly defining responsibility for each position, and solving in the fastest possible way ordinary people or entrepreneurs’ issues.

The combat on corruption and campaigns for thrift practice and against wastefulness have received positive response from authorities at all levels and industries as well as strong support from people of all walks of life and the entire society.

As a result, the work is undergoing great changes for the better.

II. Some difficulties and shortcomings in the development of the economy

First, although the economic growth rate in the first half was high, it was still lower than the whole year target of 8.5%. In order to achieve its yearly GDP target, the growth rate in the second should surpass 9%, which demands a high determination and concerted efforts from the administrations at all levels and all industries as well as business circles.

Secondly, some major industrial cash earners suffered lagging-behind growth rates against the industrial average. Crude oil production output, for example, was reduced by one tonne as compared to the corresponding period last year. Meanwhile, electricity with its growth rate estimated at 11.6%, natural gas at 7.7%, and cement at 11.6% appeared falling behind demands for daily life and production.

Thirdly, the slow agricultural growth in both production output and added values has impacted on the national economy. Droughts, insects and birdflu had been developing complicatedly and are posing threats to production, community health and daily life if no immediate measures are taken, despite the current control of these problems.

Fourthly, the slow implementation and disbursement of investment commitments, the State budget, Government bonds and State credits as compared to the progress made in the corresponding period last year required greater efforts by public agencies, enterprises and project executives so as to meet targets set forth by the National Assembly.

Fifthly, year-on-year import growth estimated at 30.4% has triggered a surge in trade deficits, accounting for 21.3% of the gross export revenues.

Sixthly, though still under control, price increases hit a high level while an instability threat is looming over the market. To control the price hike in an effort to stabilise the macro-economy and the people’s daily life would be a key task for the remaining period of the year.

Seventhly, rampant traffic accidents, food poisoning, and problems in management and use of vaccines have aroused public concerns; complicated developments of public petitions, especially the assembly of a large number of petitioners in Hanoi and Ho Chi Minh City have asked for concerted efforts that lead to immediate solutions.

III. Some solutions for the following six months

In the following months of 2007, the Government guidelines are to continue implementation of measures aiming at realizing  successfully  three major tasks: (1) High and sustainable economic growth rate; and effective solution to social problems, hunger eradication and poverty reduction; (2) strongly boosted administrative reform, which creates significant changes in administrative procedures reform; (3) prevention of and struggle against corruption, effective practice of thriftiness and struggle against thriftlessness

The solutions below are to be attached importance to:

1.  To maintain stability and balance of the country’s macro-economy to keep its rapid and sustainable growth, and to reach the expected growth rate of 9 percent

 To find out effective measures to boost up export and increase export value, and to curb the excess of imports over exports. An increase in export is expected to reach up to 22-23 percent.

To ensure financial and monetary balance, pay attention to banking system, rate of exchange; seek measures to maintain  stock market stability, avoid over-heated security market, effectively mobilize and allocate  development investment capitals.

2. To focus on tackling difficulties, creating favorable conditions for production and business; to boost up the implementation of investment projects, particularly the ones which are able to create impetus for economic development

To strongly accelerate growth rate of driving force industries and services of advantage

To continue to enhance investment environment with enabling conditions to attract foreign direct investment.

To boost up disbursement of investment capital for basic constructions

3. To continue to carry out comprehensive measures for positive and sustainable hunger eradication and poverty reduction

4. To play an active role in prevention of and struggle against epidemics in agriculture; and in prevention of and struggle against natural disasters, and in overcoming their consequences.

5. To tighten control over food quality, hygiene and safety

6. To focus on management to ensure traffic safety, to curb traffic accidents

7. To continue to accelerate the administration reform, which links closely to prevention of and struggle against corruption; practice of thriftiness and struggle against thriftlessness

Source: Website Dang Cong san, Website Chinh phu,, Website Tong Cuc Thong Ke, Website Bo Ngoai giao; website Vietnam News Agency (July 20, 2007); website Bao Nhan dan (July 21, 2007), Government Report delivered by Deputy Prime-Minister Nguyen Sinh Hung at the 12^th  National Assembly Meeting on July 19^th, 2007

Note: Part III. “Some solutions for the following six months” is synthesized and translated by Department of Press and Information, MOFA