Vietnam’s economy grows stably thanks to flexible management
Direct capital flows to restore production
In the latest report, the World Bank said that despite facing many difficulties, the Vietnam economy still has good resistance.
The World Bank highly appreciates the growth rate of Vietnam’s industrial production index, which increased to 8.5% in February. Generally, in the first two months of the year, the industrial production index of the whole industry increased by 5, 4% over the same period. Processing and manufacturing continue to be the growth engine for the entire industry in particular and the economy in general.
Processing and manufacturing continue to be the growth engine for the entire industry in particular and the economy in general. (Illustration image – Photo: Investment Newspaper)
The economy is on the rebound, businesses and people expand their production and business… Along with that, the demand for capital increases sharply. In the first two months of the year, credit growth in Ho Chi Minh City reached 2.65%, the highest level in the past 4 years, and nearly 1.5 times higher than the overall credit growth in the country. The acceleration right from the beginning of this year shows a rather optimistic picture about the prospects of the country’s economic locomotive.
From the beginning of the year until now, Sang Ban Mai Joint Stock Company has disbursed 30 billion dong of working capital and borrowed from banks to buy more machines and expand production, which is expected to increase revenue and profit at least. 20% this year.
“The year 2022 is a breakthrough year for all businesses that want to grow their business to make up for what has not been achieved in 2021, so bank support from loans is extremely important for any business. any,” said Mr. Tran Thanh Trong, General Director of Sang Ban Mai Joint Stock Company.
Having the need to expand investment in cold storage, transportation, etc. in Ho Chi Minh City and neighboring provinces, earlier this year, ABA Commercial Solutions Joint Stock Company (ABA Cooltrans) increased its loan size by more than 30 % compared to 2021.
“Financial cost is one of the big expenses, so the bank’s adjustment from 0.5 – 1% is one of the things that helps us a lot”, said Ms. Tran Thi Thu Mai, General Director of the company. shares ABA Commercial Solutions (ABA Cooltrans), said.
In order to promote credit growth at the beginning of the year, besides the group of solutions related to financial costs, such as loan interest reduction, free transaction, etc., it is necessary to have flexibility in credit approval.
“Previously, we could evaluate how businesses grow or profits grow, but in the 2 consecutive years of COVID-19, we don’t exclude falling revenue and decreasing profits, we need appropriate policies. , to accompany them, for mutual benefits”, said Mr. Nguyen Thanh Nhan, Head of Corporate Banking Division, Viet Capital Bank.
In previous years, credit growth in the first two months of the year in Ho Chi Minh City was usually below 1%, but this year has reached 2.65% and is expected to increase by 1% in March.
“Credit still focuses on the production and business sector. Accordingly, the proportion of loans in this field accounts for about 67-70%. Credit in the processing industry increased by 5%; restaurants and catering services increased by 5%. , stay reached nearly 9%”, said Mr. Nguyen Duc Lenh, Deputy Director of the State Bank’s Ho Chi Minh City branch. Ho Chi Minh, information.
The leader of the State Bank of Ho Chi Minh City said that, in addition to the general policy, will promote the program to connect banks – businesses in the area, with a committed capital of 424,000 billion VND.
Control and curb inflation
Economic recovery efforts are also facing difficulties, which is the large fluctuation of commodity prices in the world.
Since the beginning of the year, the price of gasoline and many commodities, raw materials and fuels in the world has had strong fluctuations and has had a significant impact on the domestic price level.
The problem at the moment for the management is to be flexible and proactive, but at the same time, it must control inflation and the increase in prices, raw materials, fuel and materials. If there is no drastic management, surely the price increase of many essential consumer goods in the country will increase even more than now.
From the beginning of the year until now, the world gasoline price has fluctuated strongly, increasing from 44 to 60% depending on the product. However, the fluctuation in the commodity that is considered bread, the input of this economy in the country only fluctuates from 20 to 39%. In addition, from April 1, each liter of gasoline will be reduced by about 2,000 VND, due to the reduction of environmental protection fees.
Since the beginning of the year, the price of gasoline and many commodities, raw materials and fuels in the world has had strong fluctuations and has had a significant impact on the domestic price level. (Illustration image – Photo: Investment Newspaper)
“The government submits to the National Assembly and the National Assembly Standing Committee to issue a resolution so that we can immediately reduce the environmental protection tax, of which it is expected to reduce 50%, or about 2,000 VND/liter of gasoline. It is important when controlling. If inflation can be controlled and the macro economy can be stabilized, it will help businesses recover and grow again,” said Mr.
Accepting that the state budget will reduce revenue by nearly VND 30,000 billion when applying a reduction in environmental protection fees for each liter of petrol. However, this policy and many other policies, such as reducing VAT, keeping interest rates stable, etc., have been highly appreciated, because both show initiative and flexibility; at the same time, it also shows the Government’s determination and determination in controlling and curbing inflation and stabilizing the macro-economy.
Price pressure and inflation pressure are increasingly present, so at this time, macroeconomic stability becomes more valuable and meaningful. Therefore, the fact that Vietnam remains steadfast and keeps macroeconomic stability has been highly appreciated by international organizations.
Although there are still many difficulties and challenges, but with flexible management, with many drastic synchronous solutions of the Government and close coordination of ministries and sectors, the prices of many types of domestic products are currently low. is still under control.
Vietnam’s economy still has stable growth thanks to flexible management
In the context that economies around the world are taking measures to combat high inflation, as recently the US Federal Reserve (FED) had to increase the base interest rate range with a series of hikes. interest rates to control inflation, for Vietnam, international organizations believe that Vietnam’s economy still has stable growth thanks to the flexible management that helps ensure pillars such as export, investment attraction and domestic consumption.
“Inflation risks, the imminent global shift towards monetary tightening may reduce policy flexibility. We appreciate Vietnam’s efforts to keep interest rates unchanged, thereby helping Supporting credit growth and managing inflation risks Vietnam’s recovery will accelerate markedly in 2022, starting at the end of Q1. Growth forecast at 6.7% for 2022. Background The current situation shows challenges not only for Vietnam but many other countries, which is balancing economic growth with price stability,” said Ms. Michele Wee, General Director of Standard Chartered Bank Vietnam. determined.
Standard Chartered Bank highly appreciates Vietnam’s efforts in keeping interest rates unchanged, thereby helping to support credit growth and manage inflation risks. (Illustration image – Photo: Investment Newspaper)
“End of February, Vietnam’s exports showed a solid recovery. Exports increased 13.6% year-on-year thanks to growth in other industries, showing that factors outside Vietnam are very strong. However, Vietnam needs to be cautious in the context of high prices of raw materials and materials, and the electronics industry often needs to be imported.We appreciate the support package of VND 350,000 billion to promote production and investment. implemented early in the first quarter of this year. Vietnam’s medium-term outlook remains positive,” commented Mr. Tim Evans, General Director of HSBC Vietnam.
“Currently, Vietnam is maintaining an expansionary monetary and fiscal policy for economic recovery, so the room for these two policies will be limited. In this context, the price control of commodities In addition to ensuring compliance with market requirements and roadmaps, reducing pressure on the state budget, balance on the other hand also needs to be balanced. growth engine”, said Mr. Nguyen Minh Cuong, Chief Economist of the Asian Development Bank (ADB).
At the recent Government meeting, Prime Minister Pham Minh Chinh requested greater efforts and determination to soon overcome difficulties and take advantage of time to accelerate the process of economic recovery and development. – The country’s society, striving to achieve a high growth rate in the first quarter of 2022.
The fierceness and determination of the head of the Government has been and will be the driving force for Vietnam’s economic engine to recover soon and regain its growth trajectory in the near future.
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