Priority given to developing production and reducing trade deficit

It is essential to boost production to meet the growing demands for domestic consumption and for export, while curbing the trade deficit, said the Minister of Trade and Industry (MoIT) at an online conference on April 5.

Limiting import volume

In the first quarter of this year, Vietnam’s import surplus reached US$3.51 billion, raising the ratio of import surplus to exports to 25 percent, or five percent higher than the set target.

According to the MoIT, the increase in import volume could be attributed to a reduction in the export of agricultural products, crude oil and coal. However, the import of materials for the production of consumer goods saw a rapid increase. The local economy has suffered due to the pressure of imports exceeding exports, especially in the current context when imports are experiencing a sharp increase in both volume and cost.

Many businesses said that they are under considerable pressure when the import price remains higher than export price. The Vietnam Steel Association said that the price of steel ingots on the global market has risen to US$550/tonne, while big steel ore providers are keen to increase their prices by 30-40 percent.

Similarly, the Vietnam Chemical Group claimed that since the beginning of this year, fertiliser prices on the world market have surged dramatically, with DAP increasing by between US$90-120/tonne. The prices of some material needed to produce fertilisers have trebled compared to last year’s figures.

There is growing concern about the import of luxury products that should be limited and kept under control. For example, the import of Iphones in the first three months hit US$1 billion.

Minister Vu Huy Hoang said he has liaised with the Ministry of Information and Communications to control the import of this product. He also stressed on the need to encourage Vietnamese people to buy domestically-made products to help increase the competitiveness of Vietnamese products.

“The State-owned sector should buy products made by local businesses. In the near future, the government will ask all State-funded agencies and organisations to use Vietnamese-made products,” Hoang said.

The MoIT will issue a list of locally-made products and ban the import of similar products and there will also be regulations to boost the development of ancillary industries and limit the import of certain materials for production, he added.

Ensuring non-stop electricity supplies for production

According to the Electricity of Vietnam Group (EVN), it is difficult to ensure a non-stop electricity supply in April, May and June due to the bad weather and the shortage of water in hydro-electric reservoirs, while the domestic demand for electricity is constantly increasing.

Day Duc Khoi, EVN’s Deputy General Director, said that when the GDP growth rate reached 5.83 percent, the growth in electricity consumption should have risen by 12-13 percent. However, the current growth in electricity consumption has doubled, reaching an alarming level of 22.6 percent. This demonstrates waste when using electricity.

According to the EVN’s calculations, the electricity sector can supply 270 million kWh/day in April, 275 million kWh/day in May, and 285 million kWh/day in June. If the consumption demand is higher, then the sector cannot ensure an adequate supply.

The MoIT also predicted a high level of electricity consumption and asked the EVN to work closely with the relevant agencies to utilise electricity sources to the maximum level. The Ministry said it will also adjust gas supplies to ensure the Ca Mau electricity plant keeps operational during the dry season.

In addition, the electricity sector will step up inspections on the use of electricity and cut power to those who use electricity in an inefficient manner.

Many businesses were worried about electricity cuts as this would cause a negative impact on their production levels. A representative from Ho Chi Minh City’s Electricity Department proposed that the electricity sector ensures uninterrupted electricity supplies for big cities and industrial zones that make substantial contributions to the country’s exports.

Minister Vu Huy Hoang said that in the current context when the electricity sector cannot ensure an adequate supply of electricity for the whole country, the sector should prioritise industrial production and schools and hospitals. In case the sector cannot provide a constant supply, it should publicise the times of powercuts before taking such action, he added.

(VOV)

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