Recovering in Q1, accelerating in Q2: Positive economic figures

SGGP
By the end of the first quarter of 2022, industrial production in Ho Chi Minh City has prospered, with the added value of the whole industry increasing by 5.5 percent. Along with that, export turnover of goods is estimated at nearly US$11.9 billion, up 3.5 percent; foreign direct investment capital reaches nearly VND10 trillion. This shows that HCMC's economic growth is recovering strongly.
Recovering in Q1, accelerating in Q2: Positive economic figures ảnh 1 Production at a garment company in HCMC. (Photo: SGGP)
Efforts to rise

Statistics from the HCMC Union of Business Association (HUBA) show that most member enterprises have received enough orders for production from now until the end of the year. Ms. Mai Kieu Lien, General Director of Vietnam Dairy Products Joint Stock Company (Vinamilk), shared that this year, the company still sets a revenue target of VND64.07 trillion and pre-tax profit for the whole year at VND12 trillion. Although the economy was extremely difficult due to the pandemic in 2021, the total consolidated revenue of enterprises still exceeds the mark of VND60 trillion, coming from three sectors, including domestic, export, and foreign branches. In the current context, the domestic market continues to be the main growth driving force with double-digit growth. It has created a solid basis for the feasibility of its targets this year.

From the export perspective, Mr. Tran Viet Anh, General Director of Nam Thai Son Import-Export Joint Stock Company, shared that from the end of 2021 to now, the export orders of 2022 have covered the manufacturing capacity. Currently, the company is focusing on producing export orders for US partners. Especially, export orders, especially from China, are shifting strongly to Vietnam, so enterprises are planning to expand production to take advantage of new opportunities.

According to the Handicraft and Wood Industry Association of HCMC, export orders of the wood industry are full until the third quarter. Many enterprises even have had enough production for the whole year of 2022. In the first three months of the year, the export turnover of the wood industry reached $3.94 billion. Currently, the world furniture demand is still on the rise, which is a great opportunity for the wood industry to grow robustly.

Positive signals from the domestic and export markets have contributed to the recovery of HCMC's GRDP in the first quarter of 2022 by about 98 percent compared to the same period in 2021 (GRDP was 5.46 percent in the first quarter of 2021). The index of industrial production (IIP) continued to have positive growth. Several other economic activities posted positive results, with retail sales of goods increasing by 4.8 percent; revenue from freight transport, passenger transport, loading and unloading services, and transportation agency services also surging by 8.2 percent over the same period. Of which, warehousing and transportation support services accounted for 65.4 percent, up 10.8 percent.

Capital injection, mechanism dismantling

To maintain the heat of economic growth in the first quarter for the next quarters, summarizing the opinions of many businesses, Mr. Nguyen Ngoc Hung, Vice Chairman of HUBA, said that authorities should create favorable conditions for financial support packages can soon reach the hands of manufacturing enterprises. It is necessary to take into account appropriate support policies for small and medium-sized enterprises, creating a foundation to connect with FDI enterprises producing end products or large distribution systems.

For the export market, Mr. Nguyen Ngoc Hung said that there should be coordination between ministries to bring the content of removing market barriers into the meetings of intergovernmental committees. Of which, it is necessary to proactively raise the issue of technical barriers, as well as solutions to remove market barriers, at international trade forums in which Vietnam participates. In addition, the participation and implementation of procedures for promoting trade facilitation must be promoted, such as strengthening the signing of cooperation agreements or mutual recognition of standards, inspection processes between competent agencies of Vietnam and FTA partner countries, and reducing customs procedures.

In terms of capital support for businesses, Mr. Nguyen Ngoc Hoa, Vice Chairman of HUBA, Chairman of the Board of Members of the State Financial Investment Company in HCMC, said that the city needs to develop and implement the short-term loan support package, reduce further loan interest rates, exempt and reduce taxes, fees, and land rents for enterprises.

As for the capital support fund under the State Financial Investment Company, it is necessary to flexibly transfer capital flows for enterprises to borrow for fixed asset investment and production expansion to working capital loans. Because, at present, enterprises rarely need to borrow capital to invest in production expansion, but they are very "thirsty" for working capital to increase the proportion of raw materials for production to minimize the impact of the increase in the price of imported raw materials from the global market. However, according to regulations, the fund can only lend money for fixed asset investment, this is the reason why the city's capital support fund for enterprises is redundant, but businesses are thirsty for capital.

Sharing the same opinion, Mr. Nguyen Khac Hoang, Director of the HCMC Statistics Office, said that authorities need to provide capital to help enterprises restore production and business activities. At the same time, they need to focus on handling bottlenecks and knots on land, resolving legal conflicts over procedures for land allocation, determination of compensation unit prices, and payment and settlement procedures for capital construction to speed up public investment capital disbursement. In the immediate future, priority should be given to removing difficulties for slow-disbursed projects, especially key and large-scale projects with spillover effects, improving production capacity for the economy.

Moreover, they need to build solutions to upgrade port infrastructure and logistics to help clear goods faster and more efficiently; continue to control inflation in the area through price stabilization programs; recommend ministries and sectors to have overall solutions to ensure a long-term adequate supply of petroleum products, iron, and steel for the economy.

By Ai Van – Translated by Gia Bao

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