INDUSTRY AND TRADE SECTOR LIKELY TO MISS MANY GROWTH TARGETS

Slow growth

The Ministry of Industry and Trade said industrial production in July 2016 showed no signs of robust growth and was little changed from June, which was lower than that of the same period of 2015. In the first seven months of the year, industrial production expanded 7.2 per cent over the same period, much lower than the growth of 10 per cent in the corresponding period of 2015, because the mining sector dropped 2.7 per cent (compared with the growth of 8.7 per cent in the same period of last year), and the processing and manufacturing sector climbed 9.9 per cent, lower than the 10.4 per cent growth in the same period of 2015.
 
Exports were projected at US$96.83 billion in the seven months, up 5.3 per cent year on year, lower than the growth of 9.2 per cent a year ago period. In particular, the domestic sector earned US$27.93 billion, up 2.4 per cent year on year and the foreign-led sector bagged US$68.9 billion, including crude oil, up 6.5 per cent.
 
July imports declined 1 per cent from the previous month and down 1.3 per cent from July 2015. In the first seven months of 2016, import turnover was estimated at US$95.03 billion, down 0.9 per cent from the same period of 2015. Specifically, the domestic sector spent US$39.64 billion, up 1.2 per cent, and the foreign sector accounted for US$55.4 billion, down 2.4 per cent.
 
Commodity markets were stable. Prices of some essential commodities decreased, especially fuels, raw materials, energy and foods. Commodity supply and demand on the market were guaranteed. The market capacity continued to be expanded, with the growth rate approximating the previous year. This was a positive and important factor for economic growth, macroeconomic stability and social security.
 
Retail revenue of goods and services in July 2016 was estimated at VND295,691 billion, up 0.9 per cent over the previous month and up 10.4 per cent over the same period of 2015. In the first seven months, the retail revenue of goods and services totalled VND1,842,968 billion, up 9.4 per cent year on year (lower than the 9.9 per cent growth in the same period of 2015). If inflationary factors were excluded, the growth was 7.48 per cent.
 
Consumer price index (CPI) in July edged up 0.13 per cent over June, climbed 2.48 per cent over December 2015 and rose 2.65 per cent over the base period of 2014. CPI shot up 1.82 per cent year on year in the first seven months of 2016.
 
Hardships on the horizon

Mr Hoang Quoc Vuong, Deputy Minister of Industry and Trade, affirmed that a lot of difficulties are waiting the industry and trade sector in the last months of this year. As the growth target set for 2016 is unlikely to be attainable, the Ministry of Industry and Trade defined to focus on the following solutions in August like reviewing processes and procedures and facilitating businesses. State-owned groups like EVN, PetroVietnam and Vinacomin must have measures to promote development, serve growth objectives, and expand production operations.
 
Regarding exports, the Ministry of Industry and Trade will carry out solutions to reduce the time and costs required for handling export and import administrative procedures. It will continue to implement specific measures to exported agricultural and seafood products and effectively deploy the project “Promoting Vietnamese companies to take part in foreign distribution networks to 2020”; carry out measures to upgrade infrastructure to apply 52 administrative procedures of Grade 3 and Grade 4 online. By the end of 2016, all the administrative procedures of Grade 3 and 30 per cent of Grade 4 will be made online.
 
On industrial production, Deputy Minister Vuong added that the ministry will strengthen supervision and inspection in execution of production and business plans, development investment plans and tasks assigned to State-owned enterprises. It will speed up the progress of industrial investment projects to enhance production capacity.
 
The Ministry of Industry and Trade will keep close track of the domestic market, coordinate with relevant bodies to control CPI at a reasonable rate (below 5 per cent) and balance the supply and demand of essential products.

Source: VCCI