The message was highlighted by Alain Cany, chairman of the European Chamber of Commerce in Vietnam (EuroCham), in an interview with the Daily after the organization’s business luncheon entitled “Getting things done - Overcoming challenges in a multicultural working environment” in HCMC on Tuesday.

Cany’s point was echoed by Spanish economic and commercial counselor in Vietnam, Alberto Cerdán when he responded to the Daily’s questions about his view of recent increases in gasoline and electricity prices as well as the Vietnam dong devaluation.

Considering the latest developments in the world and Vietnam, Cany said the Government should revise the initial targets for 2011 as recent moves regarding the dong devaluation as well as higher gasoline and electricity prices would make impact on the country’s inflation and economic growth.

“(The Government should) forget about the targets that were made at the time when global prices were not like they are today,” Cany said. “The Government has announced the (inflation) target for 7%, and so they will have to revise it.”

Cany did not project any specific percentage for inflation in Vietnam, but noted the Government would do very well if it was able to curb inflation at less than 10% this year. “It is going to be very difficult.”

The consumer price index has this year to date risen 3.78%.

Cerdán said surging prices of food, commodities and crude oil had led to higher inflationary pressure everywhere in the world, not in Vietnam alone, making 2011 a tough year for nations and enterprises.

“Therefore, high inflation is unavoidable,” he said.

Cany said inflation in Vietnam would depend much on when and what kinds of measures the Government would take when it still needed some growth to generate new jobs. “The good news is in the last days the Government is not talking about 7% (GDP) growth anymore. The message we are starting to get from the Government leaders is that they do not go for high growth,” Cany said.

Cerdán said the good things were that the Government leaders had attended to growth quality rather than quantity, and this would help the country achieve more balanced and sustainable growth.

Cany believed that it would be better for Vietnam’s economy to grow 6% this year and this target should be obtainable. “I can see in the export and domestic consumption areas and everything as there is a big momentum there.”

To control inflation and sustain economic growth, Cany urged a brake on credit growth at around 15% this year and a few additional monetary measures to prevent speculation against Vietnam dong.

“If they do these effectively within two and three months, I’m still optimistic that they can maintain a certain level of stability for the local currency and reduce inflation in the second half of the year,” he said.

Cerdán said the Government could manage to maintain an easy loan access for manufacturing and other sectors that really help generate growth for the economy and jobs for locals.

He said although the stronger U.S. dollar that is closely linked to euro would place some impact on Spain’s exports to Vietnam this year and probably push wages here higher, Spanish companies looked at this ASEAN market with their long-term view. For this reason, Vietnam is still a good destination for European companies to do business and invest.

Cerdán said 2010 was a remarkable year for bilateral trade between Vietnam and Spain with exports from the former to the latter increasing by 17% to some one billion euros and the latter’s outbound sales to this market rose 40% to 160 million euros.

Source: Saigon Times.