Gov promises to focus on stock clearance, but businesses still keep insecure
21-11-2012 13:05:19+07:00
Gov promises to focus on stock clearance, but businesses still keep insecure
The Ministry of Industry and Trade (MOIT) keeps optimistic about the industrial inventories, saying that the inventory index has been on the decline. However, the indexes remain sky high at over 40 percent in some industries.
The Prime Minister, when answering the National Assembly’s Deputies’ inquiries on November 14, said that the government would focus on clearing inventories in 2013. However, businesses say they still keep insecure about the demand.
Clearing property inventories – the key to the market lock
Clearing inventories, in the thoughts of many people, means clearing the unsold real estate products now in oversupply, because this is the industry which has the highest inventory index.
Real estate developers said they do not think the government would be able to make a breakthrough to help defrost the real estate market in the last two months of the year. They said that one should not expect to see big changes in the market until early 2013, when more drastic measures are taken to stimulate the total demand of the national economy.
In general, analysts believe that the demand would be increasing towards the end of the year, when people increase their purchases for Tet holiday.
However, the high sale season of many industrial products, including building materials, is over. Most of the construction projects were kicked off at the beginning of the year, while building materials were ordered mostly in the third quarter of the year already.
According to Dr Vu Viet Ngoan, Chair of the National Finance Supervisory Council, the construction sector once made up 10 percent of GDP. However, the sector has witnessed minus growth rates over the last two consecutive years.
Experts have estimated that the unsold real estate products’ value has reached 40,750 billion dong. This does not include the half-finished projects and the half-done inventories.
Meanwhile, if calculating the real estate credit on the total outstanding loans of the national economy, the figure might be 1000 trillion dong.
A report by the Ministry of Industry and Trade showed that the industrial inventory index has decreased from 40 percent in June to 20 percent. However, some leading companies in the building material industry have reported the rise in the stocks.
The inventory index of the cement industry, for example, had increased by 50.6 percent in comparison with the same period of the last year. A cement plant in Binh Phuoc province reportedly asked the provincial authorities to pay tax in cement in the third quarter of the year.
A director of a real estate firm, which is a member of the Construction Enterprises’ Association, said frankly that he does not think the inventory index has decreased, once the real estate market remains frozen.
He went on to say that he cannot see any factors that can help improve the financial health of enterprises or boost the unsold products.
How to use the key?
While experts agree that it is necessary to defrost the real estate market first when implementing the plan to clear the industrial stocks, they think differently about how to do that.
Minister of Construction has affirmed that the real estate market would warm up from 2013 thanks to the revival of the national economy. Meanwhile, Governor of the State Bank of Vietnam said the handling of the bad debts – mostly from real estate credit, with the collaterals accounting for over 70 percent of outstanding loans – needs the cooperation of all relevant ministries and branches.
The governor, while affirming that the State Bank the work would go beyond banks’ capability, if other ministries do not commit to cooperate with them, has refused to give the deadline when the bank bad debt can be settled.
vietnamnet
