On April 2, 2019 in Hanoi, the Office of the Government (OOG) organized its monthly press conference for March 2019 to review the socio-economic situation in March and during the first Quarter of 2019. The representatives of the Ministries and agencies also responded to several questions on the issues of public interest recently. Deputy Governor Dao Minh Tu of the State Bank of Vietnam (SBV) attended the conference.
At the conference, Mr. Mai Tien Dzung, Spokesperson of the Government, provided some briefing on the monthly Government Meeting of March, and disseminated the instruction of Prime Minister Nguyen Xuan Phuc that Ministries, agencies should focus on accelerating the economic development, but must not ignore the social issues of great public interest, especially the issues related to culture and education areas. The Prime Minister requested that Ministries and agencies discuss thoroughly those social issues affecting the social development, and the objectives of sustainable and inclusive growth.
According to the Spokesperson of the Government, in context that the world economy and trade are slowing down, in combination with the domestic risks caused by the African swine fever (ASF), the climate change impacts, especially the extreme climate conditions and droughts in the Central highland provinces, etc., the results from the implementation of the economic development tasks have been positive and encouraging, particularly: The gross domestic product (GDP) in the first Quarter of 2019 increased by 6.79% (lower than the GDP of the same period of 2018, but higher than the average of the 2011-2017 period). This is quite a high GDP growth, reflecting the fact of the domestic economy continuing to be stable, the industrial production keeping on growing significantly, and business and investment conditions getting further improved.
The macroeconomic conditions were stable; the consumer price index (CPI) in March reduced by 0.21% over the previous month. The average CPI during of the first Quarter of 2019 increased by 2.63% as compared to that of the same period in 2018.
The industrial production index (IIP) rose by 9.2%, of which the manufacturing and processing industry posted the highest increase of 11.1%. The IIP was lower than that of the same period of 2018, but higher than that of the previous years (specifically, the same period of 2015: increased by 9.3%; 2016, 2017 and 2018 increased by 8.2%, 5.1%, and 12.7% respectively).
Agricultural production continued to grow; especially the fisheries sector grew by 5.1% on a year-on–year basis (the highest level of growth in the last 9 years).
The total demand increased sharply with the total retail sales and revenues from consumer services were up by 12%, higher than that of 9.9% in the same period of 2018. The total revenue of retail sales and consumer services (with price factor deduction) increased by 9%, higher than that of 8.9% recorded in the same period of 2018. International tourist arrivals in Viet Nam in Q1 reached over 4.5 million, an increase of 7%.
The country’s export turnover rose sharply, reaching an estimated USD 22.4 billion in March, an increase of 61.1%, of which the turnover of the domestic economic sector was USD 17.05 billion, an increase of 9.7% compared to the same period of last year. The export turnover in Q1/2019 reached USD 58.51 billion, an increase of 4.7%. The trade surplus in March was USD 1.56 billion.
Total social investment capital rose by 8.8%. New and additional FDI registered capital reached over USD 5.1 billion, up by 30.9% over the same period in 2018. The FDI disbursement hit USD 4.12 billion, representing an year-on-year increase of 6.2%.
FDI attraction was one of the best economic achievements in the first Quarter with many new big projects with high quality and technology. The number of start-up and re-started businesses reached over 43,500, of which the number of start-up businesses was 28,451, an increase of 6.2%. Meanwhile, the number of restarted businesses reached over 15,000. Unemployment rate was at a low level of 2.17%.
With regard to the monetary policy operation, the SBV had been managing the interest rates in line with the macroeconomic developments and the money market, stabilizing the interest rates and directing the credit institutions to review and balance their finance to apply reasonable lending interest rates. The mobilization and lending interest rates continued to be stable, with common short-term lending interest rates at 6 to 9%/year, while medium and long term lending interest rates at 9 to 11%/year. Right after the Conference on the banking sector’s tasks in 2019, the state-owned commercial banks proactively reduced their lending interest rates to support the businesses operating in the priority areas under the direction of the Government with a common reduction of about 0.5%/year.
By March 25th, 2019, the credit capital increased by 2.28%, equivalent to the same period of 2018 (2.78%). Credit for most priority areas increased significantly. Specifically, credit for the support industry increased by 3.44%; credit for the export sector increased by 5.4%.
Particularly for the rice sub-sector, in order to provide timely support for the sale of Winter-Spring crop of 2019, the SBV Governor has directed the SBV branches in 13 provinces in the Mekong Delta region and the commercial banks to concentrate capital, accelerate the disbursement to timely and fully meet the capital needs of the businesses and traders for purchasing rice from the farmers. Especially, the State-owned commercial banks have taken the lead by lowering their short-term lending interest rate to 6%/year to support the businesses to purchase rice. As a result, the credit institutions in the Mekong Delta region have disbursed about VND 10,719 billion to organizations and individuals to purchase over 1.7 million tons of rice in the Winter-Spring crop of 2019, helping farmers to control rice price reduction.
Recently, the SBV has also promptly carried out a solution to help pig farmers who suffered from the African Swine Fever (ASF) outbreak in Vietnam. In addition, other credit programs under the directions of the Government and the Prime Minister, such as credit support to reduce losses in agriculture, lending to encourage clean agriculture, high-tech agriculture, etc. have also been implemented drastically by the credit institutions. Credit for the high-risk sectors has been strictly controlled, in line with the orientations of the SBV.
The Spokesperson of the Government shared the information that Vietnam Chamber of Commerce and Industry (VCCI) has recently released the 2018 Provincial Competitiveness Index (PCI 2018) Report. The VCCI’s surveys showed positive improvements of the business environment in several sectors as compared to 2017. The informal costs continued to reduce and the administrative reforms continued to be accelerated. However, the Government still needs to improve the transparency, the quality of career education, enhance the support services for businesses, and facilitate further the administrative procedures related to land use, taxation and customs.
In the coming time, the Prime Minister called upon the Government and each member of the Government, all Ministries and agencies, to concentrate on removing the obstacles and hindrances in order to accelerate the production and business, with a view to successfully achieving the socio-economic development objectives of year 2019.
Mai Huong