“All in all, such credit growth is insignificant,” said Minister-Chairman Vu Duc Dam of the Government Office at a regular Government press briefing.

This is a clear indication of difficulties and challenges faced by the economy although there has appeared no slowdown in growth as feared, said Dam.

He said this credit growth was calculated in cash. With corporate bonds and bank bills in dong factored in, credit growth would have been negative in the first seven months.

The Government has set a target of achieving credit growth of 8-10% in the banking system this year.

Speaking at the regular monthly Government meeting, many Cabinet members said the socio-economic situation in the first seven months had undergone some positive changes, moving towards the goals set by the Government.

January-July export sales are estimated at over US$62.9 billion, up 19% over the same period last year. Total imports amounted to nearly US$63 billion, rising 7.3% year-on-year. Trade deficit is projected at US$58 million in the first seven months, equivalent to 0.09% of total exports.

Under the Government’s Resolution 13, 208,250 businesses have enjoyed an extension of April-June value-added tax payments totaling around VND10 trillion. In addition, corporate income tax payments by about 8,260 enterprises have also been rescheduled, with a total of VND347.5 billion.

The service sector continued to grow well with total retail sales of goods and services estimated to surge 18.7% in the first seven months. The tourism industry attracted 3.83 million international tourists to Vietnam, up 10.8% year-on-year.

However, the Government members admitted the economy had run into multiple troubles, especially the lower-than-expected growth. The consumer price index (CPI) is lower than expected.

Businesses have had difficulty accessing credit while consumer demand has stayed low, leading to an increasingly build-up of inventory.

Prime Minister Nguyen Tan Dung stressed the need for further lowering lending rates for businesses active in fields such as agriculture and export, small and medium enterprises and labor-intensive firms.

“Banks must join hands with businesses to find ways to alleviate difficulties with funding in order to spur the development of production and business,” Dung said.

Regarding macroeconomic stability and inflation control, he urged debt restructuring and bad debt reduction in line with a restructuring of weak banks. Moreover, it is a must to publicize bad debts and unhealthy banks.

Ministries and provincial governments were asked to accelerate the disbursement of ODA, budget capital and foreign direct investment (FDI), says the Government web portal.

In January-July, some US$6.25 billion of FDI was realized, almost the same as the year-ago figure. ODA disbursement reached US$1.9 billion, picking up 24.6% year-on-year, according to a press statement on the Government meeting.

Nearly 40,000 new enterprises had registered for establishment as of July 20, with total capital of VND247.2 trillion, down 12.7% in number and 11.6% in capital over the same period of last year.

Thus far, there have been over 663,800 enterprises set up nationwide, including some 468,600 active ones, or 70%. Around 30,300 enterprises dissolved or suspended operations in the first seven months, rising 6.4% year-on-year.

To date, there are about 1,300 enterprises wholly owned by the State. Most State-owned enterprises are inefficient.

Source: SaigonTimes