What do you think about the economic growth and inflation rate of the coming months?

I think that the GDP of the second quarter of 2008 would be a little lower than the first quarter and the figure would be even lower in the third quarter. I think that the GDP growth rate would be 7-7.5% by the end of the year. Meanwhile, the inflation rate will decrease.

However, how low the inflation rate drops will depends on the world’s economy. No one can say for sure how high the oil price will be and what the US economy and the world’s economy will be like.

I think the 12-13% inflation rate (the same as the previous year) would be the ideal scenario for 2008. As for GDP growth, we should not be too demanding at this moment, when all other countries in the world have to lower their targeted growth rates.

What will the Government do if the world’s oil price keeps rising? Will it let the petroleum prices increase to come closer to the world’s prices?

This would be a big challenge to the Government. If the Government allows petrol distributors to sell petrol at higher prices, it would be more difficult for it to restrain inflation. However, if it does not, it will have to spend more money on compensating losses for importers.

I think that the State has to sacrifice some state funded investment projects to settle social problems caused by the high inflation, including the compensation for losses. In other words, in order to fight against inflation, the state, businesses and people all have to share difficulties. Businesses have to think of cutting input expenses, the state has to cut spending, while people have to tighten their belts.

What do you think Vietnam should do to fight against inflation and push up economic growth?

I think that the 19 measures put forwards by the Government are enough. I think that the high inflation is the problem of the total supply and total demand, therefore, any solution to curb inflation must be drawn up based on the analysis on the total supply and demand.

Despite the high inflation, the deposit interest rates have still been slashed, which does not ensure the real profit for depositors. What would you say about that?

The positive real interest rate policy is the aim in long term. However, the interest rates cannot be positive at any moments. While people all gather strength to fight inflation, accepting the negative interest rates is the way of people to share difficulties with the state.

Regarding the credit growth restriction, I think that this is a suitable measure. The high inflation nowadays can be seen as the consequence of the credit race of banks that kicked off in previous years.

(Source: DTCK)