Vietnam shows signs of economic growth slowdown

Vietnam shows signs of economic growth slowdown

There have been signs of an economic growth slowdown, said Deputy Prime Minister Nguyen Xuan Phuc at the opening of the third session of the National Assembly’s 13th tenure, began Monday in Hanoi.

GDP growth in the first quarter of this year was only 4 percent, far lower than the figures recorded in 2011 and 2010, which were 5.57 percent, and 5.84 percent, respectively, Phuc told the meeting.
Specifically, the industrial and construction sectors only posted a 2.94 percent growth, the deputy PM added.

Phuc said lending interest rates remain too high, preventing businesses from accessing loans for production. The high input costs, poor consumption, and high unsold inventory indexes have driven firms to reduce production, or even stop operation, dissolve, or declare bankruptcy.

“More than 17,700 businesses countrywide have ceased operation or dissolved in the first four months of the year, which is a 9.5 percent year-on-year increase,” said Phuc.

“Meanwhile, the unsold inventory index recorded at April 1 of the processing and manufacturing sector rose 32.1 percent against the same period last year,” he added.

During his opening speech, NA Chairman Nguyen Sinh Hung also stated that the country’s production and business are facing difficulties, and “show signs of slow growth and deflation.”

Easing difficulties

In proposing solutions to the current issues, the government report suggested slashing lending interest rates, increasing businesses’ access to bank loans, and deferring or exempting certain taxes.

The government also pledged to apply adequate methods to handle businesses’ debts, especially those with effective operations and potential for development.

Certain unreasonable barriers in investment will also be removed, while the complex administrative procedures are set for simplification.

The government will also focus on boosting domestic consumption to help reduce manufacturers’ large unsold stocks.

“Given the current difficulties of the country’s economy, it’s hard for us to achieve the growth target of 6 or 6.5 percent this year,” said Nguyen Van Giau, chairman of the NA Economic Committee.

Giau said the industrial production index recorded in April only rose by 4.3 percent, a three-year low, which acted as warning of the slowed-down production.

“Eighteen out of the 32 main commodities of the industry posted declined growth,” stated Giau

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