Vietnamese economy escapes difficulties (04/6)
04/06/2013 - 15 Lượt xem
Recorded results
Compared
with March 2012, the Index of Industrial Production (IIP) in March 2013
grew 5.6 percent. The growth was 5.8 percent in April and 6.7 percent
in May. In the first five months of 2013, the index grew 5.2 percent
compared with the same period last year. These results were considered
as a good signal (the IIP of 2012 increased by a mere 4.8 percent
compared with 2011).
Clearly,
industrial production is recovering, promising an improvement in the
economic situation of the whole country. The ancients believed that a
healthy economy must be based on industrial, agricultural and trade
development. Unlike the situation of the first four months, in May the
Vietnamese economy experienced good changes in terms of industry,
agriculture and trade. Notably, throughout 2012 and in early 2013, the
entire industrial sector was stagnant despite an increase in the export
value - this was considered as a paradox in an economy that was
undergoing industrialization and modernization.
Since
the beginning of 2013, more than 31,000 new businesses have been
established, up 4.8 percent compared with the same period last year,
with total registered capital of over VND156.43 trillion. The number of
businesses announcing their dissolution decreased by 0.9 percent while
more than 8,800 businesses resumed their operations after temporarily
closing for some time.
Exports
continued to grow, by over 15 percent. The attraction of Foreign Direct
Investment (FDI) and Official Development Assistance (ODA) continued to
be successful. More than US$1.5 billion of ODA and US$4.58 billion of
FDI were disbursed. On average, US$918 million of FDI was disbursed per
month against US$871 million in 2012.
Up
to May 22, 2013, bank credit has grown nearly 2.3 percent compared with
December 2012 with VND credit growing 4.57 percent. This was an
important change as credit growth was minus during the first four months
and inconsiderable at the same point of time last year. It is believed
to pave the way for Vietnam to achieve the 12 percent credit growth
target set for 2013.
In
the last two months, trade deficit considerably increased. In the first
five months of 2013, trade deficit totaled about US$2 billion with
major imported including machinery, equipment and steel for specific
uses in the manufacturing and processing industries.
Together
with successful efforts to curb inflation, maintain macroeconomic
stability and ensure social security, above mentioned changes have
created a new impulse for the Vietnamese economy to escape stagnancy and
achieve satisfactory results in the remaining seven months of 2013.
Urgently stimulating consumption and clearing bad debts
Factors
which are hindering the recovery of the Vietnamese economy cannot be
ignored. Reality shows that the export growth rate is falling (19.7
percent in March, 16.9 percent in April and 15 percent in May).
Total
state budget revenue in the first five months of this year just equaled
nearly 33 percent of the yearly projection, while total spending
equaled more than 34 percent, leading to five-month overspending of
VND67.23 trillion (25.4 percent of total revenue), according to the
Ministry of Planning and Investment.
A
strong decrease in the Consumer Price Index (CPI) reflected a decline
of the domestic market, meaning that the domestic market has not brought
into play its role as a source of support for industrial, agricultural
production and service development. The CPI of May decreased by 0.06
percent compared with April. In the first five months of 2013, the CPI
grew 2.35 percent compared with December 2012, mostly thanks to
petroleum price falls - this growth was considered unsustainable.
Therefore,
it is necessary to stimulate not only investment but also consumption.
The securities market underwent positive changes in the last 10 days
thanks to over VND2 trillion from the VND30 trillion credit support
package which has been approved by the government. Eliminating debts for
businesses by putting the Debt and Asset Trading Corporation into
operation is considered as an urgent solution.
In
the current situation, many experts believe paying and clearing debts
must be considered as investment in development. The total amount of
debts related to basic construction projects has amounted to VND100
trillion. Based on lessons drawn from the support for the securities
market, it is believed that if the state assists businesses in paying
half of that total, many difficulties currently facing the construction
sector as well as other related sectors will be resolved, facilitating
positive changes in other socioeconomic sectors.
At
a regular meeting of the government in May, Prime Minister Nguyen Tan
Dung and Deputy Prime Minister Vu Van Ninh required further efforts to
deal with bad debts. Debts hinder businesses from implementing new
investment projects. Prime Minister Nguyen Tan Dung also required the
Finance Minister to concentrate on maintaining state budget balance to
prevent a deficit. He emphasized that it was necessary to ensure
sustainable growth and prevent adverse impacts on economic
restructuring.
Along
with efforts to curb inflation and maintain macroeconomic stability, it
is necessary to consider clearing bad debts as an important task which
helps promote investment in development and stimulate consumption./.
Source: VEN
Source: VEN
