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Efforts To Rescue Businesses (09/5)
09/05/2012 - 19 Lượt xem
Continuous decline in production
Statistics from the Ministry of Industry and Trade show that the industrial production index of April 2012 rose by merely 1.5 percent compared with March (the processing industry achieved a growth rate of 3.7 percent; the mining
industry suffered a decline by 2.3 percent; electricity, gas and water
production and distribution decreased by 2.4 percent). In the first four months of 2012, the industrial production index rose by 4.3 percent compared with the same period last year (the mining
industry achieved a growth rate of 2.6 percent; processing,
manufacturing industries 3.8 percent; electricity, gas and water
production and distribution 14 percent).
The industrial growth rate in the first four months of 2012 was lower than that in the same period of 2010 (7.9 percent) and 2011 (10 percent).
April 2012 saw a decline in the production index of the mining industry. The output of coal production in the first four months dropped by 3.3 percent compared with the same period last year. Coal exports decreased by 4.2 percent. The inventory level of clean coal in early April 2012 was six million tonnes, up nine percent compared with the same time last year. Electricity, gas and water production and distribution also declined. The electricity output in April was estimated to reach 9.2 billion kWh, down 3.7 percent compared with March. The declined coal and electricity output reflected the stagnancy of production. The decline
in both domestic consumption and export of coal showed that not only
domestic businesses have faced difficulties but it is the actual situation of the entire global economy.
The processing industry still has to cope with numerous difficulties with the industrial production value growing by merely 3.8 percent in the first four months of 2012 compared with the same period last year (in the first four months of 2011 compared with the same period of 2010, the growth was 13.1 percent). Economists attributed the production results of the processing industry in the first four months of 2012 mostly to difficulties that faced the Vietnamese and global economies which led to a decline in purchasing power; domestic companies received less export orders; the interest rate applied to loans has been reduced but is still high. The high inventory index also reflected a decline in exports. Data from the General Statistical Office show that on April 1, 2012, the inventory index of the processing industry was 32.1 percent higher than that of the same time in 2011.
In the first four months of this year, Vietnam suffered a trade deficit of US$176 million which accounted for 0.5 percent of the export value (in the same period last year, trade deficit was US$4.89 billion). Although curbing trade deficit is an important solution to promote economic growth, such a decline in trade deficit reflects the stagnancy of domestic production as a large volume of goods that Vietnam imports are production materials.
Efforts to 'rescue' businesses
To reduce difficulties for businesses, on April 11, the Government reduced the interest rate ceiling applied to loans to 12 percent. It is predicted that the interest rate applied to loans will continue to fall and reach about 10 percent at the end of this year. However, in the opinion of economists, the answer for the question 'Will the reduction of interest rates help improve the situation?' can be found after several months but not right now.
To 'rescue' businesses, Deputy Minister of Industry and Trade Nguyen Nam Hai said that as a State management body in the field of economics, the Ministry of Industry and Trade has proposed macro solutions to facilitate business access to loans with a low interest rate. The ministry has actively assisted businesses in trade promotion activities and efforts to boost the sale of Vietnamese goods in rural areas as well as in building and expanding the distribution network. The ministry
has also helped businesses improve management and apply modern
technologies in production to increase productivity, reduce the production cost and enhance the competitiveness of products. Such solutions have had good effects. In some sectors, the inventory level has decreased considerably. For example, the inventory index of the fertilizer sector was 1.5 million tonnes in March but it was reduced to 500,000 tonnes in April.
In the coming period, Deputy Minister Nguyen Nam Hai emphasized that domestic businesses will continue to need help so that they can overcome difficulties in seeking access to loans, selling their products and reducing the inventory level. There must be incentive policies to increase consumer purchasing power.
Stagnant industrial production in the first four months of 2012 has raised concerns about whether Vietnam can realize its six-percent industrial growth target set for this year. Rescuing businesses is a solution to help the whole country achieve the yearly industrial growth target.
Source: VEN
