According to the Ministry of Planning and Investment (MPI), these positive signs have helped to boost the country’s GDP to 5 percent for the whole of 2009.
The industrial sector has also shown signs of stabilizing, posting a growth rate of more than 10 percent in August and 13.8 percent in September.
The provinces with a high increase in industrial production value compared to the same period last year are Quang Ninh (13.3 percent), Thanh Hoa (11.3 percent) and Can Tho (9.3 percent). Despite facing a lot of difficulties, the agricultural sector’s production value managed to increase by 2.6 percent compared with the same period last year.
However, the Vietnamese economy is predicted to encounter more difficulties in the remaining months of this year. Over the past nine months, export turnover was estimated to have reached US$41.73 billion, down 14.3 percent. The export turnover from foreign-invested enterprises (not including crude oil) was US$ 16.7 billion, down 6.3 percent from last year’s figure.
A sharp fall in export value was seen in several products such as electrical wire and cables (26.5 percent), ceramic and porcelain products (25.9 percent), bamboo rattan products (21.3 percent) and wood products (14.2 percent).
The Ministry of Industry and Trade has predicted that export volume will likely see a further drop, therefore, provinces and businesses need to come up with effective measures to maintain or expand their export markets.
Regarding the consumer price index (CPI), the Deputy Minister of Planning and Investment Cao Viet Sinh, said that September saw the CPI increase by 4.11 percent in comparison with last December’s level, by 1.59 percent in HCM City and by 1.25 percent in the Mekong Delta provinces.
The Department of Planning and Investment in HCM City attributed the increase in CPI to the rising price of input materials such as petroleum and electricity and the impact of the Government’s stimulus packages. These need to be put under strict control as the CPI tends to increase in the remaining months of the year.
Another concern is that the disbursement of investment capital is very slow while there is an urgent need to prime the pump.
According to the Ministry of Planning and Investment, only 56 percent of investment capital has been disbursed, accounting for 39.4 percent and 61 percent of the set target for the State budget and local sources of funding, respectively.
Meanwhile, the disbursement of capital sourced from the sales of Government bonds for transport and irrigation projects reached only 45.1 percent of the planned target, with the state and localities accounting for 53.3 percent and 36.8 percent of the total. Funding from the sales of Government bonds for healthcare and education remained low at 35 percent and 60 percent, respectively.
In addition, many capital sources coming from the sales of Government bonds in the past two years have not yet been fully disbursed. For example, Hanoi’s healthcare projects in 2008-2009 were estimated at VND 70 billion but only VND1.8 billion has been disbursed so far. Hai Phong fared no better with only VND8 billion out of the total VND14 billion being disbursed.
The amount of capital transferred from last year’s sales of Government bonds to this year was VND7,700 billion and that from the State budget was VND20,000 billion. Therefore, the Government needs to come up with effective solutions to make full use of these capital resources for development, particularly in the context of the economic slowdown.