Recovery gathering momentum

Many firms have survived a knock-out blow and are getting back on their feet

Government Office Minister Vu Duc Dam told VIR that: “The government has decided not to increase medical services costs and petrol prices. This is to help enterprises’ production and business.”

“Over the next 10 months, the total credit growth rate will be 12 per cent. Providing capital for enterprises is a special priority in the government’s agenda in 2013. The government has ordered the ministries of Planning and Investment (MPI), and Finance, and the State Bank to apply specific action plans to fuel enterprises with capital,” Dam said, adding that banks’ bad debt had declined from 8 per cent in 2012 to 6 per cent.

In a bid to boost the domestic production, the government during the first quarter will accelerate public investment and disbursement of state capital. Better mechanisms to lure capital from suitable investment forms like build-operate-transfer model or private-public partnership will be made.

“Vietnam’s index for industrial production (IIP) in this year’s first two months  was 6.8 per cent against last year’s first two months when the IIP sat at 3.9 per cent only. It is expected that the IIP will continue rising,” Dam said.

The two-month IIP of the processing and manufacturing industries, which contributed to 70 per cent of Vietnam’s gross domestic product growth, grew 7.9 per cent against last year’s corresponding period. Some sectors with high on-year IIP growth during this year’s first two months included power (up 11.7 per cent), electric equipment (up 51.3 per cent), spare parts (up 45.9 per cent), fertiliser (up 43.3 per cent) and footwear (up 35.9 per cent).

Also, Vietnam’s total retail and service revenue in the first two months of this year was VND422.2 trillion ($20.3 billion), up from VND380.3 trillion ($18.28 billion) of last year’s corresponding period.

Dam said Vietnam enjoyed a trade surplus of $1.68 billion during the first two months of this year, and the country would continue seeing big export growth.

“Vietnam’s industrial production will continue recovering in the coming time, but slowly. Goods consumption will gradually improve together with a decrease in inventories,” said an MPI report on February’s economy.

According to Deloitte Touche Tohmatsu’s 2013 Global Manufacturing Competitiveness Index issued in early February, Vietnam’s competitiveness would rank 10th in the world’s top 10 most competitive markets over the next five years, from its current 18th position. This index was made based on surveying 550 high-profile leaders of manufacturers worldwide.

The MPI this month also issued the report of a business confidence survey conducted in late 2012 over 910 local and foreign invested enterprises in manufacturing and  services sectors in northern Bac Giang province, Hanoi, central Danang city and Ho Chi Minh City.

Some 75 per cent of commercial and services enterprises said they would have long-term stable performance in Vietnam, while the rate was 80 per cent for manufacturing enterprises.

Manufacturing enterprises saw high confidence indexes on the economic situation (34 points), business performance (43), goods output (44) and revenue (44). These point levels are considered to be quite high, according to the MPI report.