Sun. Nov 27th, 2022

Vietnam’s economy has seen improvements in the first three months of
this year but a lot of difficulties remain ahead, especially for
businesses.

The conclusion was made during a
meeting between the Ministry of Planning and Investment (MPI) and
relevant ministries, agencies and localities in Hanoi on March 26.

According to participants, one of the silver linings
in the first-quarter economic panorama was that the country’s export
turnover reached nearly 29.7 billion USD, up 19.7 percent against the
same period last year and equivalent to 24.5 percent of the yearly
target.

Of which, that of foreign-invested
businesses (excluding crude oil) was close to 17.4 billion USD,
representing a year-on-year increase of 27 percent and accounting for 58
percent of the country’s total.

Economic experts
said the export growth in the period under review maintained a rate
higher than the import growth (17 percent) and the 10-percent target set
by the National Assembly.

Staples such as crude oil, garments, coal, wood, phones and electronic parts continued to record high export growths.

The export growth was largely thanks to the FDI sector, which has maintained its high growth during the past four years.

According to the MPI’s Foreign Investment Department, by March 20, the
country had 191 licensed projects with a total registered investment of
nearly 3 billion USD, up 2.2 percent year-on-year, and 71 projects had
added a total 3.1 billion USD to their investment, marking a 3.7-fold
increase over the same period last year.

The GDP
growth was estimated at 4.89 percent while that of the same period last
year stood at 4.75 percent. The service sector recorded the highest
growth of 5.65 percent, followed by the industrial and construction
sectors with 4.93 percent and the agro-forestry-fishery sector, 2.24
percent.

However, the economy also faced numerous difficulties, especially for industrial production and business development.

In the first quarter, the industrial production index rose only 4.9
percent over the same period last year. Of this, the index of the mining
industry increased 2.1 percent and that of the processing and
manufacturing, 5.4 percent, and electricity production and distribution,
9.4 percent.

Meanwhile, the development of
businesses also saw a lot of difficulties. As many as 15,707 new
businesses were registered with a combined capital of over 79 trillion
VND (3.78 billion USD), down 6.8 percent in number and 16.1 percent in
capital compared to the same period last year.

According to Deputy Minister of Planning and Investment Dang Huy Dong,
there should be stimulus packages to boost consumption and reduce
inventories so as to ease the situation.

Despite a
decrease in inter-bank interest rates and the State Bank of Vietnam
(SBV)’s policies to support production, businesses still find
difficulties in accessing low-interest loans, he said.

As inventory and bad debt issues are not solved immediately and
guarantee funds for small- and medium-sized enterprises have not started
working in many localities, banks should make detailed assessments on
businesses’ production in order to put these funds into operation, said
Pham Xuan Hoe, a representative from the SBV.

Hoe
emphasised the need to activate the real estate market, suggesting the
SBV coordinate with the Ministries of Construction and Finance to build
an inter-sectoral circular that allows the mortgage of assets to be
acquired.

Tran Xuan Hai from the Ho Chi Minh City
Department of Planning and Investment proposed that banks continue to
lower lending interest rates and increase disbursement for businesses.-VNA

By vivian