Positive economic changes - good foundation for GDP growth

In the first quarter of 2014, the economy had positive changes, notably in export indexes, industrial production increased compared to the same period last year; inventories decreased; CPI increased slightly; ODA and FDI capital continued to increase compared to the same period...

888 Company Limited (Thanh Hoa) specializes in producing shirts and jackets for export to the EU market. (Photo: Dinh Hue/VNA)

Dr. Nguyen Bich Lam, Director General of the General Statistics Office, Ministry of Planning and Investment, affirmed that this result will be a good basis for GDP growth in the coming quarters.

Difficulties still exist

According to the General Statistics Office - Ministry of Planning and Investment, the GDP growth rate in the first quarter of 2014 reached 4.96% compared to the same period in 2013 (the first quarter of 2013 increased by 4.76%); in which, the agriculture, forestry and fishery sector increased by 2.37%; the industry and construction sector increased by 4.69%; and services increased by 5.95%.

Import and export is one of the bright spots, in which total export turnover in the first quarter is estimated at 33.35 billion USD, up 14.1% over the same period in 2013.

Import turnover in the first quarter is estimated at 32.34 billion USD, up 12.4%. Thus, the first quarter has a trade surplus of about 1 billion USD.

Notably, the industrial production index (IIP) in the first quarter of 2014 increased by about 5.2% compared to the same period last year (while the same period last year increased by 5%).

The inventory index of enterprises also decreased slightly. As of March 1, 2014, it increased by 13.4% compared to the same period last year (the inventory index as of March 1, 2013 increased by 16.5% compared to the same period in 2012).

The number of workers in industrial enterprises as of March 1, 2014 increased by 4.1% compared to the same period last year.

The consumer price index (CPI) in March decreased by 0.44% compared to the previous month, the lowest level in the past eight years. Compared to December 2013, the CPI in March 2014 increased by 0.8%, also the lowest increase in the past 13 years.

Mr. Nguyen Duc Thang, Director of the Price Statistics Department, General Statistics Office, commented that when CPI increases low, it will create conditions for commercial banks to reduce deposit interest rates but still mobilize deposits, improve liquidity, create conditions to lower lending interest rates, contribute to businesses accessing bank capital, create conditions for monetary policy to combine with fiscal policy; at the same time, this is also a good signal for consumers, especially the poor and low-income people...

Business development also showed positive signs, with both registered capital and the number of newly established businesses increasing compared to the same period last year.

Nationwide, 18,400 enterprises were newly registered in the first quarter, with registered capital of VND97,980 billion, an increase of 16.9% in the number of enterprises and 23.4% in registered capital compared to the same period in 2013.

The first quarter of 2014 also recorded more than 4,600 businesses that were in difficulty and had to stop operations now returning to operation, an increase of 48.9% compared to the previous quarter (quarter 4/2013).

Another important indicator that also received a good assessment was development investment capital. Specifically, total social investment capital in the first quarter was estimated at VND214,800 billion, equivalent to 28.4% of GDP and up 3.8% over the same period in 2013.

Disbursement of official development assistance (ODA) in the first quarter increased by 5% year-on-year, estimated at 364 million USD. Realized foreign direct investment in the first quarter was estimated at 2.85 billion USD, up 5.5% year-on-year; total registered capital was estimated at 3.34 billion USD.

Total retail sales of consumer goods and services in the first quarter also increased slightly. In addition, lower public spending compared to the same period in 2013, and slightly higher household consumption… are also considered bright spots in the economy.

According to Dr. Vo Chi Thanh, Deputy Director of the Central Institute for Economic Management, besides the achieved results, the economy still has difficulties such as domestic production and business continue to face difficulties; bad debt is still a burden at banks.

Although inflation has been controlled, it still has the potential to increase if there is a lack of consistency in implementing solutions.

Besides, the process of reforming state-owned enterprises is progressing slowly and domestic market demand has not improved much.

Continue the goal of macroeconomic stability

Mr. Bui Ha, Director of the Department of National Economic Synthesis, Ministry of Planning and Investment, said: "Economic growth indicators in the first quarter of 2014 are the highest increase in the past three years in all three regions. We see that the growth rate has tended to increase since 2013 and we believe that the rate is not increasing steadily but accelerating."

However, to achieve the GDP growth target of 5.8% this year, one of the immediate solutions set by the Ministry of Planning and Investment is to ensure close and smooth coordination between fiscal and monetary policies to achieve the goal of curbing inflation and stabilizing the macroeconomy.

In addition, the ministry will also create mechanisms and policies to encourage non-state enterprises to develop in a modern direction, expand their scale of penetration into the world market; at the same time, develop clean agricultural production in the direction of creating more added value with high-quality product chains, serving the domestic market with over 90 million people.

Dr. Vo Chi Thanh said that it is necessary to promote the equitization process of state-owned enterprises in the direction of publicizing and making the equitization rate transparent.

After equitization, enterprises need to promote initiative, creativity, improve competitiveness in corporate governance and market share of consumer products; at the same time, independently and confidently choose business lines to invest in developing highly sustainable production according to market mechanisms with their own capital, instead of state capital in a transparent legal environment with good mechanisms and policies.

The representative of the Ministry of Industry and Trade said that enterprises need to promote initiative and creativity, improve competitiveness in product quality and consumption market; proactively prepare all necessary conditions to welcome job and income opportunities when a series of trade agreements are signed between Vietnam and international organizations and partners.

Currently, for agricultural products, there are two difficult-to-sell items: rice and sugar. The Chinese market demand is large but mainly through unofficial channels.

The agricultural sector hopes that the Ministry of Planning and Investment will coordinate with the Ministry of Industry and Trade to promote exports to China through official channels instead of unofficial channels as at present.

The Ministry of Agriculture and Rural Development has proposed expanding the number of enterprises and boosting sugar export turnover. These are the two sectors that have the greatest impact on farming households.

Some other opinions say that it is necessary to support businesses to develop production; at the same time, banks also need to have solutions to facilitate credit to promote real estate business transactions.

Disbursement of government bonds is an important factor, creating a cash flow, so that businesses have investment cash flow. Therefore, representatives of some ministries and sectors recommended that the Ministry of Planning and Investment accelerate the disbursement of bond capital to actively support the macro-economy.

The General Director of the General Statistics Office also emphasized the need to flexibly apply policy mechanisms suitable to the conditions of each locality to attract economic sectors and enterprises to invest in local economic development./.

According to Vietnam +