Mr. Vu Hong Thanh, Chairman of the Economic Committee commented that the economy is facing difficulties and it is difficult to have a breakthrough in growth in the second quarter.
This statement was made by the Economic Committee when examining the Government's report on additional results of socio-economic development in 2022; implemented in the first months of 2023, at the opening session of the National Assembly on the morning of May 22.
Vu Hong Thanh, Chairman of the Economic Committee, said that the economy showed signs of deterioration from the end of 2022, extending to the beginning of 2023, resulting in GDP growth in the first quarter only increasing by 3,32%. To achieve the target of 6,5% growth this year, the average growth rate for the remaining quarters of this year must be about 7,5%.
Difficulties in the financial market and corporate bonds make it difficult for businesses to access and hardly raise capital, leading to "frozen" real estate. The main drivers of growth, such as exports, foreign direct investment, especially the decline in industrial production, are on the decline.
“The economy is really tough,” he said.
One of the main causes of the growth slowdown, according to Mr. Thanh, is the industry and construction sector, which grew by negative 0,4% in the first quarter of the year. In the first four months of the year, the index of industrial production (IIP) decreased by 1,8% over the same period, of which the IPP of the processing and manufacturing sector decreased by 2,1%. The four-month electricity consumption data fell 4 percent year-on-year, showing a decline in manufacturing activities.
With the current difficulties, it is difficult to have a breakthrough in GDP growth in the second quarter, according to Mr. Vu Hong Thanh.
Chairman of the Economic Committee Vu Hong Thanh presented the socio-economic inspection report, May 22. Image: Hoang Phong
At the same time, the Corporate Health Review Committee is declining. In the first four months of the year, nearly 79.000 businesses registered to set up and return to the market. On average, about 19.700 new businesses are established and returned to operation every month.
However, every month, 19.200 units withdraw from the market. Many businesses face great debt repayment pressure, so they have to transfer and sell shares at very low prices, in many cases to foreign countries. The lack of orders is common for businesses, and workers lose their jobs in many industrial parks.
According to the Vietnam General Confederation of Labor, nearly 547.000 employees at 1.300 enterprises had their working hours reduced or stopped due to reduced orders from September 9 to January 2022. 1% of these belong to FDI enterprises.
Enterprises have difficulty in cash flow, but access to loans is difficult, with high interest rates. According to the Government's report, the average new lending interest rate is 9,3%, but data from the National Financial Supervisory Commission shows that the average lending interest rate at 35 commercial banks by the end of March about 3%, 10,23 percentage points higher than at the end of 0,56.
Another worry mentioned by the verification agency is that the handling of weak credit institutions is slow, negatively affecting the money market, affecting the efforts of banks to lower interest rates. Bad debts tend to increase, while the ratio of provisions for credit risks to bad debts decreases, affecting the safety of the financial system.
The situation of cross-ownership, collateral assets are undervalued, loans to internal businesses, the backyard is still complicated. In the context of businesses facing many difficulties, commercial banks have high profits.
According to the previous assessment of the Government, Deputy Prime Minister Le Minh Khai said that GDP in the first quarter maintained its growth momentum but was low, reaching only 3,32% over the same period. The consumer price index (CPI) decreased, an average of 4 months increased by 3,84%.
As of April 25, credit increased by 4%, the money market and exchange rate were basically stable. The average lending interest rate decreased by 2,75 percentage points compared to the end of 0,7. Budget revenue in 2022 months was estimated at 4 billion VND, equal to 632.500% of the yearly estimate. Vietnam had a trade surplus of nearly 39 billion USD, an increase of more than 7,6 times compared to the same period in 3. Disbursement of public investment capital increased by 2022 billion VND over the same period.
However, growth is slowing, reflected in GDP in the first quarter being 1,7 percentage points lower than the same period (5,03%). Production and business face many difficulties, especially in the fields of industry, construction and small and medium enterprises. Large, traditional export markets are shrinking, businesses lack orders.
Deputy Prime Minister Le Minh Khai presents socio-economic report, May 22. Image: Hoang Phong
Newly registered FDI capital decreased by nearly 18%, realized capital decreased by 1,2%. The total number of newly established and returned businesses decreased; the number of suspensions and dissolutions increased. Due to the accumulation of inadequacies for many years, the corporate bond and real estate markets faced difficulties in liquidity and cash flow.
The supply and demand for labor is imbalanced locally and there has been a situation of workers losing their jobs in some localities and industrial zones. The youth unemployment rate is still high, over 7,6%. The number of employees withdrawing one-time social insurance contributions continued to increase, increasing by more than 19% over the same period.
In addition to objective reasons, Deputy Prime Minister Le Minh Khai acknowledged that the above decline was due to subjective reasons from the long-standing internal weakness of the economy, which gradually revealed itself in difficult conditions. . The analysis and forecasting of the situation to have a response scenario is still limited. A part of cadres and civil servants is still not drastic, timely and sensitive, besides there is also a mentality of avoidance, fear of responsibility, expulsion, fear of wrong.
10 solutions are proposed by the Government to achieve this year's growth target, which emphasizes the view of keeping the goal of macroeconomic stability, controlling inflation, promoting growth and ensuring major balances in the economy. economy.
Measures for exemption, reduction and extension of taxes and fees; accelerate the refund of value added tax (VAT); Solving difficulties with real estate projects, helping to restore cash flow for businesses are also priorities in the Government's management.
The next task mentioned by the Deputy Prime Minister is to promote disbursement of public investment capital, with the goal of reaching at least 95% this year; attract investment capital and encourage investment projects in the form of public-private partnership (PPP).
However, with existing difficulties, the Chairman of the Economic Committee suggested that the Government study further lowering the operating interest rate to reduce loan interest in order to support growth. The Government also needs to study to increase the reduction of family circumstances with personal income tax, VAT and soon correct inadequacies in petroleum business regulations, electricity price mechanism.
This agency also requested the Government to additionally report on the debt structure related to real estate (real estate businesses, home loans, real estate business).
On this point, Deputy Prime Minister Le Minh Khai said that the Government will regulate the appropriate exchange rate and interest rate, direct the banking system to reduce costs, further reduce lending interest rates and deploy housing credit packages. society 120.000 billion VND.
The Deputy Prime Minister added that the Government will propose to the National Assembly a plan with a global minimum tax and exemption, reduction and extension of taxes, fees and charges; speeding up the refund of value-added tax to contribute to facilitating production, business, and import-export activities.
Before that, look back to 2022Deputy Prime Minister Le Minh Khai said that last year's economy achieved high growth in a difficult context, with GDP increasing by 8,02%.
GDP per capita reached 4.109 USD, an increase of 34 USD compared to the number reported to the National Assembly at the last session last year. Average CPI increased by 3,15%. Budget revenue reached more than 1,81 million billion VND, up 12,5%.
The indicators of public debt, government debt, and foreign debt of the country decreased and were within safe limits. In which, public debt is 38% of GDP, government debt is 34% of GDP, and foreign debt is 36,8% of GDP.
By the end of 2022, supportive welfare policies have spent nearly VND 104.500 billion for more than 1,41 million employers and more than 68,4 million workers in difficulty.
Last year, there were 13 targets assigned by the National Assembly and exceeded the plan, but there were still two targets of manufacturing and processing industry and labor productivity that did not meet the set targets.
Deputy Prime Minister Le Minh Khai said that these bottlenecks will be overcome by the Government in directing and operating this year to achieve the goal of stabilizing the macro-economy, controlling inflation, promoting growth, and ensuring major balances of the economy.
