Fiscal policy is not effective is very important causes of disease in our country inflation. To support economic growth, the Government has made plans to spend to upgrade the infrastructure of the country and the ongoing budget deficit in the years indicated above 5% of GDP (in 2007, over 56,000 overspending billions dong). Investing for economic growth is essential, but inefficient investment, investment spread, causing huge waste for a long time is dangerous for the country's economy (read state audit report in many years we see very heartbreaking for the waste and loss of thousands of billion), while the wages of working people, the state civil servants are too low compared to the price, 30-40 years working in administrative agencies, education, health ... many people could not dream of a house. Formulation, appraisal and approval of the project, the total project and engineering design too slow, cumbersome procedures and complicated (everyone knows, everyone said, but who will be responsible for this issue ? The promise always!). The spending is inefficient, corruption, the increase has enjoyed the confidence of the public in my mechanisms and our operator. The Party and State have already seen and are adjusted, such as establishing anti-corruption agency, but need more drastic. The proportion invested in VN society in recent years the annual average of 40% of GDP and ICOR of 4.7 (mean VN is required 4.7 units of investment to create a single you grow), ny coefficient is very high compared to other countries in the region. Total demand increased, but the total supply increases, prices have increased restrictions.
- In 2007 and early 2008, the State actively implementing the roadmap adjusted to market prices for some commodities, basic materials such as electricity, petroleum, coal, ... which affect the prices of other goods.
- monetary policy in 2007 also needs to consider these issues, money supply (the total payment means) increased year 2005 was 23.4%, 33.6% in 2006, 2007 was 53.8%, a total of 3 years increased by 134.2% M2, while the 3-year growth rate of only 25.09%. The difference between the money supply increased in the last 3 years (134.5%) to GDP growth (25.09%) is very large, certainly will weigh on domestic prices, and in late 2007, early 2008 it outburst is due to the strong resonance by international inflation (weak dollar) and natural disasters.
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