National economy grows by 4.89pct in Q1

(VOV) - Vietnam is expected to achieve a GDP growth rate of 4.89 percent in the first quarter of this year, a bit higher than last year’s corresponding figure of 4.75 percent.

The Ministry of Planning and Investment (MPI) reported on March 26 that agro-forestry and fisheries obtained a growth rate of 2.24 percent, industries 4.95 percent, construction 4.79 percent, and services 5.65 percent.

In March alone, the industrial production index (IPI) rose 31.9 percent over the previous month and 5.6 percent against the same period last year. Overall, the three-month IPI saw an increase of 4.9 percent from a year ago.

Among industries, mining edged up 4.9 2.1 percent, manufacturing and processing 5.4 percent, power production and distribution 8.5 percent, and water supply and water waste treatment 9.5 percent. 

In the first quarter, as many as 15,707 businesses were established with total registered capital of nearly VND80 trillion, a year-on-year decrease of 6.8 percent in the number of businesses and 16.1 percent in capital value.

MPI Deputy Minister Dang Huy Dong stressed that industrial production remains in a fix and businesses need stimulus packages to increase sales and reduce inventories.

Although commercial banks lowered interest rates to support business operations, many businesses still find it difficult to access preferential loans, he said. 

Pham Xuan Hoe, a representative of the central bank, explained businesses’ bad debts and high inventories are hampering national economic recovery efforts and this matter cannot be solved overnight.  

He said guarantee funds for small and medium-sized enterprises have been established, but they have yet to operate efficiently as expected in localities.

Banks will examine business evaluation reports thoroughly to make these funds more efficient, said Hoe.

To unfreeze the property market, Hoe proposed that the State Bank of Vietnam, the Ministry of Construction and the Ministry of Finance to formulate an inter-ministerial circular allowing asset mortgage in the future.

Representatives of the Ministry of Industry and Trade and the State Bank of Vietnam attributed Vietnam’s trade deficit to lack of support industries, forcing businesses to import large quantities of materials for production.

They asked localities to focus on developing support industries, considering this a long-term solution.

Electricity of Vietnam (EVN) representatives reported on power production, saying if power shortages occur during the upcoming dry season, EVN will mobilise high-cost fuel-run power sources for production and domestic use.