Big export-import turnover drop mirrors production woes

The government last week reported that in April, Vietnam’s export and import turnover sat at $9.7 billion and $10.7 billion, respectively, with a trade deficit of $1 billion.

Meanwhile, the country’s export and import turnover for March stood at a higher level, with $11 billion and $11.3 billion, respectively, resulting in a trade deficit of $300 million.

In this year’s first four months, Vietnam’s total export and import turnover touched nearly $39.5 billion and nearly $40.2 billion, respectively. Thus the four-month trade surplus was about $700 million.

“The reduced export and import turnover with a trade surplus of $1 billion in April trade deficit is noteworthy. It means that local production is now facing greater difficulties than it did several months ago,” said Nguyen Van Giau, chairman of the National Assembly’s Economic Committee at this committee’s meeting last week in Hanoi.

Echoing Giau’s comment, Vu Viet Ngoan, Chairman of the National Financial Supervisory Committee, also said the on-month big decline in the export and import turnover meant the economy faced greater difficulties than it has since early this year.

Though the index for industrial production (IIP) for this year’s first four months climbed 5 per cent, it was lower than the 5.9 per cent level in last year’s corresponding period. Moreover, the four-month retail and service revenue, with price factor not included, increased only 4.6 per cent, lower than the 5 per cent level of 2012’s first four months, he said.

Mai Thi Anh Tuyet, a National Assembly delegate and director of southern An Giang province’s Department of Industry and Trade, said enterprises’ operations were being menaced by shortages of capital.

“Nearly all enterprises in An Giang need capital for production and importing goods. But banks refuse to give them loans, asking for their mortgages. But if enterprises mortgage their assets, they will have no production tools,” she said.

Under Vietnam Chamber of Commerce and Industry’s Annual Business Report 2012 released on April 18, some 700,000 enterprises were established before late 2012, but the real number of operational enterprises was more than 300,000 up to late 2012, while the rest have already stopped operations or dissolved.

The Ministry of Planning and Investment (MPI) reported that about 19,600 enterprises in Vietnam stopped operations and dissolved in this year’s first four months, up from some 15,300 enterprises in this year’s first quarter.

“Enterprises’ confidence in the market and the government’s monitoring has been waning. It is expected that the number of enterprises that have ceased operations and dissolved will continue increasing,” said Vietnam Association for Small- and Medium-sized Enterprises’ chairman Cao Sy Kiem at the meeting.

However, MPI Deputy Minister Cao Viet Sinh told VIR that: “The economy has gradually been recovering over the past four months.”

In detail, he said April’s IIP augmented 5.8 per cent on-month. Meanwhile, the IIP for this year’s first quarter increased 4.9 per cent on-month.

Additionally, the credit growth rate in this year’s first four months ascended 1.44 per cent, higher than the 0.03 per cent in this year’s first three months.