Though the GDP growth rate slowed to 4
percent in the first quarter, there were a few good signs, the Ministry of
Planning and Investment said at a meeting in Hanoi.
The
rate of 4 percent is low compared to 5.57 percent of the same period last year
and 6.1 percent of last year’s fourth quarter, the ministry said.
The
Index of Industrial Production (IIP) picked up a mere 4.1 percent year-on-year,
which is the lowest level in many years.
Multiple
processing industries such as textile, garment, leather-shoe, chemical fertilizer,
cement and steel recorded a drop in their indices.
Economic
expert Le Dang Doanh ascribed the poor growth in the nation’s IIP to shrinking
purchasing power, reflected in the consumer price index (CPI) of the early
months, as well as the high inventories of cement, steel, furniture,
fertilizer, apparel, beer and wine.
In the
first quarter, trade deficit was only US$251 million, or 1.02 percent of export
turnover. Meanwhile, CPI inched up a slight 0.16 percent in March compared to
the preceding month.
Fuel
imports fell by 32.1 percent year-on-year, while imports of fertilizer,
machinery and fabric declined 27.4 percent, 1.4 percent and 11.1 percent
respectively.
According
to Bui Ha, head of the Department for National Economic Issues under the
ministry, processing industries and consumption were experiencing tough times.
Enterprises
had to scale down manufacturing, investment, imports of machinery and
production materials and this caused stagnation in domestic production
investment.
According
to the ministry, the low CPI increase due to high inventories resulted in price
discounts, dwindling incomes and a higher rate of unemployment, all of which
led to a drop in total solvent demand and a sluggish growth in retail sales.
Though
exports reached $24.5 billion in the first quarter, the outlook for export in
the coming months is unpromising as most leather-footwear and clothing
enterprises have run out of orders, said a representative of the Ministry of
Industry and Trade.
Only a
few of the major industry players have orders to export in the second quarter,
said a representative of the trade ministry.
Sales
of electronic and cooling appliances have plummeted, while cement and steel
consumptions are suffering from the frozen property market, said the
representative.
The
representative of Electricity of Vietnam (EVN) said power output reached 26,500
kWh in the first quarter, increasing by 10.3 percent compared to the same
period last year.
However,
the fact that EVN hasn’t experienced any critical power shortage suggests that
the manufacturing sectors are in trouble, said Deputy Minister of Investment
and Planning Nguyen Van Trung.
Lam
Nguyen Khoi, deputy director of the HCMC planning department, cited data of the
General Department of Taxation which showed that 931 city-based enterprises had
closed their tax codes for dissolution in the first quarter.
More
than 5,000 enterprises have notified the tax department of their business
suspension.
According
to a report of the planning ministry which was previously submitted to the
Government, over 2,200 enterprises went through procedures of disbandment and
9,700 others registered for operation suspension in the early months of 2012.
The
number of dissolved and suspended businesses was thus 6 percent higher than the
same period last year and the number of enterprises which have completed
procedures for dissolution increased by 57 percent.
Meanwhile,
as of March 21, the number of new enterprises fell by 8 percent and registered
capital saw a year-on-year drop of 12 percent.
However,
the macro-economic situation also showed positive signs this March, after the
very bad performance in January and February, Bui Ha said.
The
first quarter’s exports continued to grow, rising by 23.6 percent compared to
the same period last year.
The
State budget revenue reached VND137 trillion as of March 15, equal to 19
percent of the whole year’s estimate.
Stable
Forex rates, lower interest rates in the monetary market, and other indicators
such as inflation, trade and budget deficits show that the overall economic
situation is becoming more stable, Ha said.
Similar
to other economic reports, the report of the Ministry of Planning and
Investment concluded that there were positive changes in the first three months
of 2012.
All
sectors recorded certain developments, and the State budget revenue saw good
results.
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