The first half of this year was a tough time for the national economy. Groups, corporations and businesses had to cope with a number of challenges, including runaway inflation, and high interest rates. Due to the tightening credit policy, they found it difficult to access capital for domestic industrial production and exports. However, out of such difficulties some bright spots appeared.

Lack of capital

In the first half of this year most businesses faced serious shortages of capital for production due to a slow industrial growth on account of high input materials such as electricity, petroleum, coal and steel.

Nguyen Ton Quyen, General Secretary of the Vietnam Timber and Forestry Product Association, says businesses should exploit domestic materials to reduce input costs and improve their competitiveness on the world market.

Quyen adds that the association is reviewing the production process to reduce spending on fuel, materials and administration costs.

Cash-strapped businesses had to resort to other resources, such as borrowing foreign loans, building business links between industrial zones and using domestic wood, Quyen says.

The tightening monetary policy, high interest rates and soaring costs of input materials drove up the prices of many domestic products, especially during the traditional Lunar New Year festival (Tet). With a new ceiling price in the domestic market, relevant ministries, departments and businesses have been asked to further cut unnecessary production costs, and strictly control market prices to prevent speculators causing more losses for consumers.

Exports up, imports down

In the first half of this year exports rose dramatically and GDP grew by US$7.06 each month - the highest growth so far. It seems likely that the yearly target for US$79.4 billion in export earnings can be fulfilled, or even over fulfilled.

In the meantime, the volume of imported products such as petroleum and fertilizer rose slightly by 0.7 percent, indicating the initial success of ministries and departments in controlling the trade deficit at an estimated US$6.65 billion, equal to 15.7 percent of total export value and lower than the Government’s projected figure.

From now to the end of this year, the domestic market will grow more complicated under the impact of spreading epidemics and soaring prices of input materials.

There is high hope that local authorities and businesses will coordinate efforts to overcome difficulties and make more headway towards curbing inflation and stabilizing macroeconomy.

VOV