Government agencies and economists all agree that the national economy has seen a strong recovery but weaker, ineffective businesses are not enjoying the benefits.
A report from the Ministry of Planning and Investment (MPI) shows the strong recovery of industrial production with the IIP (index of industrial production) in the first quarter up by 9.1 percent in comparison with the same period of last year.
The ministry put an emphasis on improvement in the manufacturing sector’s inventory situation. The inventory index decreased significantly by 6.9 percent in February.
The total retail sales and consumer service turnover in the first quarter of 2015 increased by 9.97 percent in comparison with the same period of 2014. The export turnover in the first quarter reached $35.7 billion, an increase of 6.9 percent if compared with the same period of last year.
The economic recovery can be seen most clearly in Hanoi and HCM City, the two largest economic centers.
Deputy director of the HCM City Planning and Investment Department Nguyen Thi Thu Hoa said the city’s GDP grew by 8 percent in the first quarter of the year, higher than the 7.4-7.7 percent growth rate seen in 2012-2014.
It is estimated that nearly 2,200 businesses have stopped their operation so far this year, the figure that represents the sharp fall of 50 percent if compared with the same period of last year.
Meanwhile, the growth rate was 7.6 percent for Hanoi, higher than the 6.6 percent growth rate in the first quarter of 2014.
MPI’s Deputy Minister Bui Quang Thu noted that with such a strong recovery, the targeted 6.2 percent GDP growth rate in 2015 is within reach.
However, analysts commented that Vietnamese businesses have not benefited much from the recovery.
A senior official of the MPI’s Business Development Department noted that foreign invested enterprises’ (FIEs) export turnover accounted for 70 percent of Vietnam’s total exports, while Vietnamese made up the remaining 30 percent.
While many free trade agreements (FTAs) signed and expected to be signed in the near future, 80 percent of Vietnamese businesses are not ready for economic integration.
The official said the situation is “really worrying”. “Ninety-seven percent of Vietnamese businesses are very small, weak in financial capability and unable to approach export markets,” she said.
Thu confirmed that while foreign-invested enterprises have seen stable increases in their export turnover, Vietnamese enterprises’ growth has slowed.
Thu warned that the trade deficit is returning. The excess of imports over exports in the first quarter of the year accounted for approximately 5 percent of the “quota” granted by the government earlier this year.
TBKTSG