Report of Department of Service Economy – Ministry of Planning and Investment in April 24th 2012.
I. GENERAL OVERVIEW
1. The world situation
The world economy since early 2012 generally has shown strong recovery and optimistic outlook, not only in the major economies such as the United States, Japan... but also appeared new factors which are considered as new “tigers” in global economy, notably the emergence of Myanmar recently thanks to strong reforms of economic structure of the Government and rapid opening of the economy. This optimistic outlook has been further reinforced because confidence index in the world economic prospects in the next 12 months shall rise to the highest level in the last quarters.
2. Domestic situation
Economic development in the early months of 2012 shows that the Government has achieved some important results in macro-economic stability. Tight monetary policy has pulled down inflation, stabled exchange rate and improved foreign exchange reserves…However; our economy still faces challenges from the difficulties and signs of stagnation in production of many sectors. Many branches which had high proportion of the total production value only reached negative growth rate, stock index rose to 39.4% compared to the same period last year.
The positive recovery and development of socio-economy helps Vietnam be selected among the top 3 highest growth markets in the Asia-Pacific region. Many experts indicate that Vietnamese economy will grow faster from the middle of the 2nd quarter in 2012 and achieve goals set out in 2012 through strong measures, solutions of the Government. In particular, measures to mobilize financial sources are and will be focused to implement strongly, including:
+ To focus loan money from any sources to produce.
+ To liberate output for goods; especially for export.
+ To recover property and capital markets.
The State Bank has decided to further lower interest rate ceiling by 1%, from 13%/year to 12%/year. At present, with full support elements for lowering interest rate and lending, the above decision is entirely appropriate and necessary to support production and export enterprises in key fields of the economy to help recover economy.
Export will continue to prosper before growing demand of the world economy which is recovering strongly in spite of having difficulties and obstacles. Vietnam still has a highly competitive advantage in export items, because export items are mostly essential items for both production and consumption in the markets. Vietnam’s export is also in need of extra motivation and support from the State, Ministries and Sectors of external and internal economics such as Foreign Affairs, Finance, Banking…
Domestic market: Due to weak purchasing power, abundant supply of goods, besides improved rice prices, increased petrol price from 3/2012 – have been major factors, other factors which have caused decrease or slight increase in prices still exit. They are: Petrol and oil prices have been increased but consumption has been decreased; pork prices still lower due to harmful effects of lean substance; input costs for production also decreases in volume due to stagnation or moderation and stable prices, even lower...
II. EVALUATION OF IMPLEMENTATION RESULTS IN FEBRUARY, MARCH, APRIL AND MAY OF 2012
1. Development of service sectors
Implementation situation in the first 3 months of 2012
In the first 3 months of 2012, despite significant impacts of prices of some essential input commodities for production and business increased highly such as petrol and oil, gas, etc... Vietnamese service sector continued to develop, full services focused on promoting business development, ensuring the balance between supply and demand for goods, market stability, ensuring travel needs of people; commercial business enterprises had active plans to prepare item sources to satisfy the demands, especially essential goods for consumption of people before, during and after Tet holiday. Tourism activities took place actively, the number of international tourists and the total retail sales of goods and service revenue increased strongly compared to the same period last year.
The growth rate of service sector in the quarter I/2012 was estimated at over 5% compared to the same period in 2011, in which a number of service sectors with quite growth rate like: wholesale and retail trade services, financial, banking, shipping and traveling services.
Service export in the quarter I/2012 was estimated at about US$2.5 billion, increased by over 12% compared to the same period in 2011, in which some services with great export value such as: tourism, telecommunications, transport, banking,...
Implementation situation in April and the first 4 months of 2012
April 2012 is the first month of significant influence by the increase in petrol, oil and gas prices at the end of March 2012, service sectors with fuel inputs were directly and indirectly affected by the increase in petrol prices such as: transport, tourism, retail trade, ect.... on the other hand, retail distribution services, tourism were significantly influenced by information via the mass media about lean substance for pork, toxic in butterfish, etc... These are negative impacts on consumers in general and tourists in particular.
Growth rate in the region in the early 4 months of 2012 was estimated to increase 5.3-5.5% compared to the same period in 2011, in which some services with quite growth rate such as: transport, finance, banking and tourism services.
Service export in the early 4 months of 2012 was estimated at US$4 billion, increased by over 20% compared to the same period in 2011, in which some services with great export value such as: tourism, telecommunications, transport, banking,...
(Estimates of Department of Service Economy)
However, in the early 4 months of 2012, losses caused by traffic accidents increased significantly which affected the development of service sector, especially tourism sector.
1.2. Development of some service sectors.
a. Tourism:
Implementation situation in the first 2 months of 2012
The number of international tourists to Vietnam reached 1,311.8 thousand people, increasing by 27.1% compared to the same period last year, in which arrivals for the purposes of tourism, holiday, work and visiting relatives reached 779 thousand people, increasing by 27.2%; 223.7 thousand people, increasing by 39.4%; 234.2 thousand people, increasing by 19.3%, respectively.
In the first two months of this year, some countries and regions with the number of tourists to Vietnam increased over the same period last year including: China with 290.1 thousand people, increasing by 51.5%; Korea with 141.8 thousand people, increasing by 38.4%; Japan with 108.3 thousand people, increasing by 16.9%; the United States with 97.9 thousand people, increasing by 1.5%; Taiwan with 88.1 thousand people, increasing by 40.5%; Cambodia with 61.7 thousand people, increasing by 32.1%; France with 47.6 thousand people, increasing by 18.8%; Malaysia with 46.1 thousand people, increasing by 31.9%; Russia with 39.1 thousand people, increasing by 55.1%.
Implementation situation in the first 3 months of 2012
The first quarter of 2012, festival tours took place lively, especially big festivals in the North. With this type of tourism, tours are usually designed to last one day, a few 2 day tours in accordance with time and expense of tourists. Therefore, with from 450 thousand to more than 1 million dong, tourists can choose places and departure time; combined with going sightseeing. Popular tours are Huong Pagoda (1 day), Tran temple – Phu Giay (1 day), Yen Tu (1 day), Yen Tu - Ha Long – Cua Ong (2 days), Bai Đinh – Trang An (1 day), Tay Thien (1 day), Lang Son – Mau Temple (1 day).
After many years of decline, shipping travel is gradually stable and promises to grow in 2012. Only in the first quarter, many international cruise ships to Vietnam such as: AIDA DIVA cruise ship (Italian nationality) came from Brunei carrying 2,038 tourists and 596 crew, waiters docked in SITV Phu My port (Tan Thanh district), Columbus international cruise ship (Germany) with 550 tourists and crew mainly with German nationality to Vietnam on the Da Nang – Hai Phong sea route, Costa Classica and SuperStar cruise ships carried more 4,000 tourists and crew on the Ha Long tour sea route for one day... Moreover, Costa Classica cruise ship would continuously arrive in Ha Long on 13th, 17th, 21st and 29th days of February and SuperStar Aquarius cruise ship belonged to the advanced fleet of Star Cruises, with 07 cruises which were going to dock at Chan May port (Thua Thien Hue) and Tien Sa port (Da Nang) from 14/2 to 5/3.
International arrivals to our country in the First Quarter reached 1,873.7 thousand, increasing by 24.5% compared to the same period last year, in which arrivals for the purposes of tourism, holiday, job and visiting relatives reached 1,112.6 thousand, increasing by 24.5%; 319.5 thousand, increasing by 28.2%; 334.5 thousand, increasing by 23.2% respectively.
In the first three months of the year, some countries and regions with the number of tourists to Vietnam increased over the same period last year including China with 391.6 thousand people, increasing by 36%; Korea with 206.3 thousand people, increasing by 43.3%; Japan with 159.2 thousand people, increasing by 16.9%; the United State with 134.8 thousand people, increasing by 0.9%; Taiwan with 118.6 thousand people, increasing by 33.7%; Cambodia with 90.6 thousand people, increasing by 18.1%; France with 72 thousand people, increasing by 14.9%; Malaysia with 70.2 thousand people, increasing by 32%; Russia with 56.2 thousand people, increasing by 45.4%.
Considering means of transportation, the number of international tourists to Vietnam in the first quarter of 2011 is mainly by air, increasing by over 26.8%, by land increasing by 11.4%, by sea increasing by 33.7% compared to the same period last year.
Considering the purpose of the tour, in the first three months of the year, the number of tourists for the purpose of visiting relatives increased by 23.2% compared to the same period last year because this time coincided with Lunar New Year days; therefore, overseas Vietnamese coming home for Tet holiday were quite crowded, followed by tourists for relaxing increased by about 24.5%, tourists with the purpose of work increased by about 28.2%, tourists with other purposes increased by about 17.8%.
Implementation situation in April and the first 4 months of 2012
Ending the festival travel season of the first 3 months of the year, at the beginning of April, tourist activities became actively because this time was the launching month for summer holiday all over the country. Over the last few years, 30/4 – 1/5 holidays always attractted a large number of international and domestic tourists because they lasted for a long time and localities had many attractive programs for tourists at this time.
In this April, many big events were held such as the opening ceremony of National Tourism Year Northern Central Coastal Area and Hue Festival 2012 in Thua Thien Hue Province, the first Culinary Festival of coastal provinces and cities in Ba Ria – Vung Tau province, fireworks festival in Da Nang on the occasion of 30/4 ,ect...
During tourism season of this year, some positive policies were implemented to attract international and domestic tourists such as: the price of luxury hotel rooms at tourism centres decreased as compared to the same period last year for tours with a large number of tourists; some international and domestic flight stages of Vietnam airlines applied ticket discount program and point accumulation for bonus,…
Because the holiday 30-4/01-5 prolonged, average tour price increased from 20 - 30% was partly due to increased petroleum price, means of transport and some related services also increased. For tours to Ha Long, Sapa, Cua lo, Nha Trang, Da Lat, Phan Thiet,….the number of domestic and international tourists doubled in registration compared to the normal days, up to the middle of April, some Tours to key destinations were clean out of. Some high quality tour to Thailand, Singapore, China, and Malaysia were also clean out of, in particularly almost air tickets to the above countries were sold out on this occasion.
The number of international tourists arrived in Vietnam in April was estimated at about 565 thousand people, increasing by 22.8% compared to the same period last year. In the first 4 months of the year, the number of international tourists reached about 2.4 million people, increasing by 23.8% compared to the same period last year.
International tourists arrived in Vietnam in April, 2012 mainly from some traditional markets and increased in comparison with the same period last year: China (increasing by 34%), Korea (increasing by 40%), Japan (increasing by 11%), Taiwan (increasing by 30%), and Cambodia (increasing by 11%).
Considering means of transportation, the number of international tourists to Vietnam by air increased 10%, increased 32% by sea compared to the same period last year. Considering the purpose of tour, the number of tourists for the purposes of relaxing, working and visiting relatives increased 23%, 27% and 22% relatively.
(Estimates of Department of Service Economy)
b. Post and telecommunications.
Implementation situation in the first 2 months of 2012
The number of new telephone subscribers in the first two months of the year reached 1.94 million, increasing by 34.1% compared to the same period in 2011, including: 4.9 thousand fixed subscribers, accounting for 24.6% compared to the same time and more than 1.93 million mobile subscribers, accounting for 35.6%. The number of telephone subscribers in the whole country up to the end of February, 2012 was 134.2 million, increasing 3.6% compared to the same period last year, including 15.3 million fixed subscribers, decreasing by 1.4% and 119 million mobile phone subscribers, increasing by 4.3%.
The number of internet subscribers in the whole country up to the end of February 2012 reached 4.3 million, increasing by 18.2% compared to the same period last year. The number of internet users at the end of February 2012 was 32.6 million people, increasing by 18.4% compared to the same period in 2011. Total net revenue of post and telecommunications in the first two months of this year reached VND22.1 trillion, increasing by 21.4% compared to the same period in 2011.
Implementation situation in the first 3 months of 2012
The number of new telephone subscribers in the first three months of the year reached 2.6 million, increasing by 35.3% compared to the same period in 2011, including: 7.6 thousand fixed subscribers, accounting for 35.4% compared to the same time and 2.5 million mobile phone subscribers, increasing by 36.4%. The number of telephone subscribers in the whole country up to the end of March 2012 reached 134 million, increasing by 3% compared to the same period last year, including: 15.3 million fixed subscribers, decreasing by 1.6% and 118.7 million mobile phone subscribers, increasing by 3.6%.
Up to the end of March of this year, the number of internet subscribers in the whole country reached 4.2 million, increasing by 17.5% compared to the same period last year; the number of internet users reached 32.1 million people, increasing by 15.3%. Total net revenue of post and telecommunications in the first three months of this year reached VND32.6 trillion, increasing by 17.9% compared to the same period in 2011.
Implementation situation in April and the first 4 months of 2012
The number of new telephone subscribers in the first four months of the year was estimated at 3.3 million, increasing by 3% compared to the same period in 2011, including: 10.2 thousand fixed subscribers, accounting for 38% compared to the same period and 3.2 million mobile phone subscribers, increasing by 3%. Up to the end of April 2012, the number of telephone subscribers in the whole country reached 134.6 million, accounting for 77.2% compared to the same period last year.
Up to the end of April this year, the number of internet subscribers in the whole country was estimated at 4.2 million, increasing by 10.2% compared to the same period last year; the number of internet users reached 32.5 million people, increasing by 10.9%. Total net revenue of post and telecommunications in the first four months of this year reached VND40.3 trillion, increasing by 5.7% compared to the same period in 2011.
(Estimates of Department of Service Economy)
c. Transport:
Implementation situation in the first 3 months of 2012
As estimated, volume of goods transported reached 154.66 million tons, volume of traffic reached about 35,249 million tons-kilometres; number of passengers carried reached 578.17 million passengers, volume of traffic reached 24,416.64 million passengers-kilometres. Compared to the same period in 2011, volume of goods transported was 108%, volume of tons-kilometres was 107.5%, number of passengers carried was 108.5% and number of passengers-kilometres was 108%.
Implementation situation in April and the first 4 months of 2012
In the early 4 months of 2012, as estimated, volume of goods transported was 237.8 million tons, volume of tons-kilometres reached about 54,572 million tons-kilometres; number of passengers carried reached 895.8 million passengers, number of passengers-kilometres reached 37,295.3 million passengers-kilometres. Compared to the same period in 2011, volume of goods transported reached 105%, volume of tons-kilometres reached 103%, number of passengers carried reached 109% and volume of passengers-kilometres reached 110%.
2. Export and Import of goods
2.1. Export and import in the first 2 months and March of 2012
a. Export and import in the first 2 months of 2012
Import in February 2012 reached US$8.3 billion, increasing by 17%compared to last month; in which, export of foreign invested enterprises (excluding crude oil) reached US$4.7 billion.
In the first 2 months of 2012, total export turnover reached nearly US$15.373 billion, increasing by 25.4% compared to the same period last year; in which, export of foreign invested enterprises (excluding crude oil) reached nearly US$8.69 billion, increasing by 51% compared to the same period last year.
Prices of many export items virtually remained unchanged in comparison with the same period in 2011, excluding some export items whose prices fell sharply such as: coal price fell 29%, rubber price fell 36.7%, cassava and products from cassava fell 6.3%. Price reduction factors alone of these items made export turnover fall US$154 million.
Export turnover in February 2012 reached US$8.58 billion, increasing by 23.9% compared to last month because import turnover in January was affected by Tet holiday; in which, import of foreign invested enterprises reached US$4.52 billion.
In the first 2 months of 2012, total import turnover reached US$15.47 billion, increasing by 8.7% compared to the same period last year; import turnover of foreign invested enterprises reached more than US$8.1 billion, increasing by 35.4%.
Average import prices of most commodities increased slightly. Prices of some import items mainly increased in comparison with the same period last year such as: fertilizer price increased by 15.6%, motorcycle components increased 12.7%, kinds of paper increased 2.1%, iron and steel increased 1.5%, automobile accessories increased 4.6%. Price increase factors alone of these items made import turnover increase about US$86 million.
Trade deficit in the first 2 months of 2012 was US$100 million, accounting for more than 0.65% of export turnover. In which, foreign invested enterprises (excluding crude oil) reached trade surplus of US$550 million.
This trade surplus level was quite low compared to the same period each year because in the first 2 months of 2011, trade deficit rate on export turnover was 16.2%. In the first 2 months of 2012, import and export turnover each month is nearly equivalent, while the average difference level between Export and import in previous year was often over US$1 billion/month. This showed that import in the first 2 months of the year tended to reduce which expressed that import demand for domestic production also tended to reduce.
b. Export and import in March 2012
Export in March 2012 reached US$9.48 billion, increasing 14.7%compared to last month; in which, export of foreign invested enterprises (excluding crude oil) was estimated at US$5.05 billion.
In the first 3 months of 2012, total export turnover reached more than US$24.8 billion, increasing by 24.2% compared to the same period last year; in which, export of foreign invested enterprises (excluding crude oil) reached US$13.7 billion, increasing by 44.3% compared to the same period last year.
Import turnover in March 2012 reached US$9.055 billion, increasing by 4.7% compared to last month, in which, export of foreign invested enterprises was estimated at US$4.685 billion.
In the first 3 months of 2012, total import turnover reached nearly US$24.58 billion, increasing by 4.8% compared to the same period last year; in which, import turnover of foreign invested enterprises reached US$12.8 billion, increasing by 24%.
In the first 3 months of the year, it was the first time; trade deficit had reached more than US$224 million. The reason is that export turnover in March increased suddenly in comparison with February: nearly US$1.2 billion. Turnover of some items increased sharply in comparison with February, including: aquatic products increased more than US$120 million cassava and products from cassava increased US$60 million, kinds of petrol and oil increased US$290 million, wood and wood products increased US$100 million, garment and textile increased US$160 million, computers and electronic components increased US$200 million. In which, import only increased US$500 million in comparison with February. Some major items decreased in import: petrol and oil reached 2020 thousand tons, decreasing 32.1% in volume and 19.7% in turnover, fertilizer reached 618 thousand tons, decreasing 27.4% in volume and 13.4% in turnover, machinery and equipment reached nearly US$3.4 billion, decreasing by 1.4%, kinds of cloths reached US$1.3 billion, decreasing by 11.1%.
Trade surplus is a target of export in the future; however, at the present, import fell more than export which indicated that import demand for domestic production is declining. Economy in general and businesses in particular are facing many difficulties in production and business development.
2.2. Export and import in April and 4 months
a. Export
Export in April 2012 was expected to reach US$8.6 billion, decreasing by 9.3%compared to last month; in which, export of foreign invested enterprises (excluding crude oil) was estimated at US$4.6 billion.
In the first 4 months of 2012, total export turnover was estimated at more than US$33.4 billion, increasing by 22.1% compared to the same period last year; in which, export of foreign invested enterprises (excluding crude oil) was estimated at nearly US$18.3 billion, increasing by 44% compared to the same period last year.
Export of some major items in the first 4 months of 2012 compared to the same period last year: crude oil was estimated at 2416 thousand tons, decreasing by 14.7% in volume and 3.1% in turnover; coal was estimated at 4387 thousand tons, decreasing by 5.5% in volume and 12.2% in turnover; garment and textile reached more than US$4.4 billion, increasing by 14.7%; leather footwear reached nearly US$2 billion, increasing by 9,3%; rubber reached 263 thousand tons, increasing by 32.8% in volume and decreasing by 8.2% in turnover; wood and wood products reached US$1378 million, increasing by 20.6%; electronic components reached more than US$2.1 billion, increasing by 98.6%; aquatic products reached US$1.8 billion, increasing by 13.3%; rice reached 1957 thousand tons, decreasing by 28.1% in volume and 27.8% in turnover; coffee reached 650 thousand tons, decreasing by 7.1% in volume and 7.8% in turnover; cassava and products from cassava reached 1860 thousand tons, increasing by 31% in volume and 13.3% in turnover...
Export volume of many major items decreased in comparison with March 2012 such as: aquatic products reduced US$40 million, coffee decreased US$100 million, crude oil reduced US$35 million, wood and wood products reduced US$70 million, garment and textile reduced US$86 million, machinery reduced US$90 million, computers and components reduced US$140 million, kinds of telephone reduced US$63 million... made turnover reduce sharply in comparison with March.
For export market in the first 4 months of 2012, it is estimated that export to American market increased 17.5% and accounted for 17% in density in comparison with export turnover of the whole country; export to EU increased 20.2% and accounted for 17.1% in density; export to ASEAN increased 16.7% and accounted for 14.7% in density; export to Japan increased 51.3% and accounted for 12.6% in density; export to China increased by 24.6% and accounted for more than 11.3% in density.
b. Import
Import turnover in April 2012 was estimated at US$9 billion, close to last month, in which, import of foreign invested enterprises was estimated at US$4.65 billion.
In the first 4 months of 2012, total import turnover was estimated at nearly US$33.58 billion, increasing by 4.4% compared to the same period last year; in which, import turnover of foreign invested enterprises reached nearly US$17.5 billion, increasing by 25.9%.
Import volume and turnover of some major items in the first 4 months of 2012 compared to the same period last year were as follows: petrol and oil reached 2744 thousand tons, decreasing by 33.6% in volume and 21.9% in turnover; kinds of iron an steel reached 2503 thousand tons, increasing by 5.7% in volume and 2.9% in turnover; fertilizer reached 838 thousand tons, decreasing by 35.1% in volume and 22.4% in turnover; kinds of paper reached 368 thousand tons, increasing by 7.6% in volume and 7.1% in turnover; plastic material reached 831 thousand tons, increasing by 3% in volume and decreasing by 1.5% in turnover; machinery and equipment reached more than US$4.6 billion, decreasing by 0.8%; computers and components reached nearly US$3.5 billion, increasing by 98.7%; kinds of cloth reached nearly US$2 billion, decreasing by 6.7%; garment and textile material and accessories reached US$945 million US$, increasing by 2.7%...
Average import prices of most commodities increased slightly. Prices of some mainly import items increased in comparison with the same period last year such as: fertilizer price increased by 19.6%, petrol and oil price increased by 11.6%, liquefied petroleum gas price increased by 13.3%. Price increase factor alone of these items made import turnover increase about US$179 million.
In the first 4 months of 2012, import from Asia accounted for 80.5% of total import turnover of Vietnam. Import markets are mainly China (import turnover from this market increased by 11.1%, estimating at 23.5% in density), ASEAN (decreased 1.2%, reaching at nearly 19.7% in density), Korea (increased 13.4%, accounting for 13.4% in density), Japan (increased 11.1%, accounting for nearly 10.4% in density) and EU (increased 13.3%, accounting for nearly 7.2% in density).
Sudden level of trade surplus of US$400 million after March made trade surplus of the first 3 months reach more than US$224 million, Export and import in April came back normal cycle (import turnover was higher than export one). Thus, trade deficit in the first 4 months of 2012 was estimated at US$176 million, accounting for 0.52% of export turnover.
Vietnam still had major trade deficit with Asian markets such as China (estimated at nearly US$4 billion), ASEAN (nearly US$1.7 billion), Korea (more than US$2.8 billion), Taiwan (nearly US$2.2 billion).
c. Some comments on import and export situation in the first 4 months of 2012:
- Export growth rate in the first 4 months of 2012 maintained at a high level (22.1% compared to the same period in 2011) and much higher than import growth rate (4.4%):
+ Industrial commodities maintained at decent growth rate. Items with big turnover such as garment and textile, leather footwear, wood and wood products reached growth rate at 10-20%; especially telephones and components increased nearly 154%, computers and components increased 98.6% which made a significant contribution to export growth.
+ In 2011, export price of agricultural products reached a record. In the first 4 months of 2012, prices of most export agricultural products decreased or did not increase in comparison with the same period in 2011 and the average price in 2011. In addition, export rice and coffee fell which made export turnover of these item groups decrease more. Generally, in the 1st quarter of 2012, export turnover of major agricultural commodities fell about 560 million compared to the same period in 2011.
- FDI sector maintained a high growth rate in three consecutive years and made a major contribution to export growth. Export turnover in the first 4 months of 2012 of the whole country increased US$6 billio,n in which turnover of FDI sector (excluding crude oil) increased US$5.6 billion. If crude oil is included, turnover of FDI sector increased US$5.5 billion. Thus, export of domestic enterprises only increased 500 in comparison with the same period in 2011.
- Import growth rate in the first quarter of the FDI sector (25.9%) was much higher than import growth rate of the whole country, because staples of this area are mainly processed, assembled ones depending on import raw materials. Import of this region increased US$3.6 billion in comparison with the same period in 2011, while import of the whole country increased US$1.4 billion.
- In the first 4 months of 2012, trade deficit of the whole country was expected to reach US$176 million, accounting for 0.52% of total export turnover; in which, in FID sector (excluding crude oil) trade surplus reached US$844 million; trade deficit in domestic sector reached US$1020 million.
- Decrease in trade deficit was a good signal but on the other hand it showed that import demand for current domestic production was declining. Economy in general and businesses in particular were meeting many difficulties in production and business development.
3. Development of domestic markets
3.1. Total volume of tons-kilometres of retail goods and salesturnover of consumption services
According to the General Statistics Office, total retail sales of goods and consumption services in the first two months of 2012 were expected to reach VND380.3 trillion, increasing by 22% as compared to the same period last year. In March 2012, it was estimated to reach VND189.055 billion, increasing by 1.18% compared to February 2012 and increasing by 21.8% compared to the same period in 2011. In April, it was estimated to reach VND192.432 billion, increasing by 1.79% compared to March and increasing by 21.6% compared to the same period in 2011.
In April, among economic sectors participating in the market, individual economic sectors still accounted for the largest density with 48.3%, followed by private and state economic sectors with the corresponding density of 35.8% and 11.6%. The contribution value of foreign invested economic sectors reached 3.1% while collective economic sector accounted for 1.2%.
3.2. Consumer price index
According to the General Statistics Office, Consumer price index in February 2012 increased 1.37% in comparison with last month, in which groups of goods and services with higher index than general increase rate were: housing and building material group increased 2.47%; restaurant and catering services increased by 2.11% (Food decreased 0.41%; food-stuff increased by 2.73%). Price index of the remaining groups of goods and services increased less than 1% or decreased including: Beverages and tobacco increased 0.86%; garment and textiles, headwears and footwears increased 0.55%; culture, entertainment and tourism increased 0.52%; equipment and household appliances increased by 0.41%; medicine and health services increased 0.29%; traffic increased 0.23%; education increased 0.07%; post and telecommunications decreased 0.16%.
Consumer price index in March 2012 slightly increased 0.16% compared to the previous month. Especially, food and food-stuff price index fell sharply, in which food decreased 1.21%, food-stuff decreased .25%. Among groups of goods and services, housing and building material groups had the highest price index of 2.31%; education group increased by 1.11%; traffic group increased 1.08%.. Price index of the remaining groups of goods and services increased much less or decreased, including: equipment and household appliances increased 0.55%; medicine and health services increased 0.48%; garment and textile, headwears and footwears increased 0.41%; culture, entertainment and tourism increased 0.36%; beverages and tobacco increased 0.16%; restaurant and catering services decreased 0.83%; post and telecommunications decreased 0.02%.
According to forecast from Department of Service Economy, consumer price index (CPI) in April 2012 would increase slowly, in the range of 0.23 – 0.28%. Goods groups with estimated high price growth rate were: restaurant and catering services; traffic; housing, electricity, water, building materials.
3.3. Supply – demand situation, prices of some essential commodities in February and March 2012.
a) Petrol and oil
In February, compared to the same period in January 2012, average price of two kinds of oil was different, while WTI oil price was $98.88/barrel, $2.43/barrel (2.40%) lower; Brent oil price was $116.06/barrel, 3.76 $/barrel (3.35%) higher. The volume of import petrol and oil in February 2012 was estimated to reach 750 thousand tons with the value of about US$725 million; increasing by 31% compared to January 2012.
In March, the price of crude oil in the world market continued to maintain at high level. Averagely, WTI oil price was US$106.42 per barrel, increasing by 5.04% compared to the same period. Brent oil price was US$124.45 per barrel, increasing by US$12.15, equivalent to 10.82%. According to preliminary data of the General Department of Customs, the volume of import petrol and oil in March 2012 was estimated at 720 thousand tons with the value of US$730 million; decreasing by 1.2% in comparison with February 2012. Generally in the whole quarter, 2,020 thousand tons of petrol and oil were imported, equivalent to 68% in comparison with the same period.
Domestic petrol and oil prices were also adjusted. Retail price of A92 petrol increased VND2,100 per liter, up to VND22,900. Kerosene, diesel, mazut products also increased from VNS600 to 2,000 per liter.
b) Iron and steel
The output of import steel of kinds in February 2012 reached 700 thousand tons with the value of US$540 million; increasing by 37% compared to January 2012; in which, import steel billet reached 40 thousand tons with the value of US$26 million, increasing by 29% compared to the previous month.
In March, because the real estate market had not shown signs of recovery, domestic steel consumption fluctuated at low rate, iron and steel production decreased 15.8%. The ouput of import steel of kinds in March 2012 reached 600 thousand tons with the value of US$490 million; decreasing by 14% compared to February 2012; in which import steel billet reached 50 thousand tons with the value of US$34 million, increasing by 35% compared to the previous month.
c) Cement
In February, the cement output in the whole sector was estimated to reach 2.72 million tons, in the first 2 months , it reached 4.92 million tons, accounting for 8.9% of this year’s plan, consumption in the first 2 months of the year, it was estimated to reach 4.64 million tons, accounting for 8.4% of the yearly plan. Import in February was estimated to reach 40 thousand tons of clinker and cement and clinker export was estimated to reach about 200 thousand tons.
In March, cement output of the whole sector was estimated to reach 3 million tons, increasing by 10% compared to February, consumption was estimated to reach 2.9 million tons, increasing slightly in comparison with last month.
According to the Ministry of Construction, cement production was gradually exceeding domestic consumption demand, which requires the cement industry to enhance to search and expand markets, including international markets. To promote the export of cement, enterprises had enhanced to search oversea markets, rationalized transportation, overcome limitations on loading and unloading or logistics activities in order to increase cement export. By the end of February 2012, the cement industry exported 226,000 tons of cement and clinker, increasing by 326% compared to the same period in 2011.
In 2011, the whole sector exported more than 5.5 million tons of cement (mainly klinker) to markets such as China, Bangladesh, Indonesia, some African countries and some countries in ASEAN.
d) Fertilizer
In February, 2012, the quantity of import fertilizer was estimated to reach 280 thousand tons with the value of US$115 million; in which urea fertilizer reached 40 thousand tons with the value of US$16 million.
In March, supply sources of fertilizers in the market were abundant, while the consumption level of kinds of fertilizer tended to decrease sharply, because many provinces in the Mekong Delta entered to harvest the 2011-2012 winter-spring crop. As estimated, prices of many kinds of fertilizer would decrease in the next time. Currently, many provinces in the North entered the Winter- Spring crop, but very little demand for fertilizers and many provinces in the South were harvesting Winter- Spring crop. Because the demand for fertilizer in domestic markets was low so sale and purchase activities of these goods across the China border were very slow, domestic fertilizer trading businesses mainly focused on consuming their inventory to recover capital. It is expected that in the near future, demand for fertilizers of domestic market is not noticeable and the prices of fertilizers in general still tend to be reduced.
Currently, prices of many types of fertilizer such as: DAP, Urea, NPK... continue to decrease 15,000-VND20,000/bag of 50kg. Thus, over the last 3 months, prices of many kinds of Urea and DAP fertilizers have decreased about 100,000 to VND150,000/bag of 50kg
In March 2012, the quantity of import fertilizer was estimated to reach 240 thousand tons with the value of US$108 million; in which urea fertilizer reached 25 thousand tons with the value of US$10 million.
3.4. Supply - demand situation, prices of some essential items in April 2012.
a) Petrol and oil
In the first half of April, 2012, price of crude oil continued to increase, and then decreased slightly. Accordingly, the price movement of petrol and oil products in Singapore market tended the crude oil price, but lower decrease level, RON 92 petrol was 0.11%, kerosene was 0.9% and FO oil was 1.16%.
Forward oil price changed insignificantly after the most decrease for two weeks on April 18. The U.S. Department of Energy said that supply sources of the country increased 3.9 million barrels last week. Bloomberg forecasted 1.8 million barrels. Prices also fell after the Deputy Prime Minister of Iraq on energy issues said that Strait of Hormuz could not close and there would no shortage of oil.
Crude oil delivered in May was at US$102.76/barrel, increasing 9 cents on New York trading exchange. Oil price decreased 1.5% yesterday to US$102.67, the lowest level since 10/4. The delivered contract in June with the most transaction increased 7 cent to 103.19 US$/barrel (19/4).
In the session on April 19, Brent oil price in June increased 0.4% up to US$118.40/barrel at ICE, London trading exchage. Price difference between European Brent oil and United State WTI oil was at US$15.16 compared to US$14.85 yesterday.
The volume of import petrol and oil in the first quarter only reached over 1.65 million m3/ton, decreasing by about 42% compared to the same period last year and accounting for only 16% of the minimum limit of this year, in which, the volume of import diesel oil and FO oil decreased over 50% compared to the same period last year.
The volume of import petrol in the first three months of the year reached over 650,000m3, decreasing by 26% compared to the same period; import jet fuel decreased 23%. In which, the volume of import petrol and oil for re-export reached 860,000m3/ton, increasing by 18.6% compared to the same period. According to the estimate by an agency under the Ministry of Industry and Trade, to the end of April, the total volume of import petrol and oil of kinds only reached over 2.3 million m3/ton, decreasing by over 40% compared to the same period in 2011.
b) Iron and steel
Ending the first quarter of 2012, main materials of building material sector such as steel, cement, bricks were unmarketable. Consumption level decreased, inventories were at an alarming rate, and so many enterprises manufactured in moderation or reduced the capacity of plants. Steel inventory increased 59.1% compared to the same period last year.
The volume of kinds of produced steels in the first quarter was estimated to reach about 1.469 million tons, increasing by 4.8 % compared to the same period. The import of steel of kinds and products from steel also increased by 7.7% and 24.8%, respectively.
The consumption level was estimated in the range of 420,000 to 450,000 tons. Steel price did not fluctuate much because the real estate market was not showing signs of recovery; demand for construction was not much plus high inventories. However, it was estimated that at the beginning of May, steel price may increase slightly due to the impact of easing real estate credit and lowering deposit interest rate made real estate market warm up.
c) Cement
According to statistics, the volume of produced cement of the whole sector in the first quarter of 2012 was 12.1 million tons, decreasing 10.7% compared to the same period last year, while the volume of consumed cement only reached 10 million tons, decreasing by 15.5% compared to the same period last year. Nearly 2 million tons of inventory products in the first 3 months of 2012 was an alarming figure, because the normal inventory index of cement sector was less than 10%.
According to forecast of the Ministry of Construction, the volume of cement in 2012, the volume of excess cement in 2012 would be around 8 - 10 million tons.
Price of input materials such as coal, oil, electricity increased and transport cost also increased due to impacts of sudden increase in petrol and oil price up to 2,100 dong/liter in the early March which made production costs of cement sector increase highly. However, because the volume of unsold goods became larger and larger, the cement sector had not raised its price to compensate for losses of production.
d) Fertilizer
Over the last few years, domestic fertilizer market had changed, increase in Urea fertilizer price leaded to an improvement for the price of DAP and Potassium. Besides, increase in petrol and oil prices had direct impacts on production as well as transportation of fertilizers and fertilizer price in the international market also increased US$5-7/tons which also drag fertilizer price in the countryc to increase.
Import fertilizer in the 3 months of 2012 also deceased more than 13%, in which, the import of urea fertilizer decreased sharply, nearly 65% because Ca Mau fertilizer plant officially put on the market the first product in late January.
III. PROPOSAL FOR SOLUTIONS TO IMPROVE OPERATIONAL EFFICIENCY OF PLAN IN 2012
1. Development of tourism
1.1 The context of implementing plan in 2012
In 2012, the world context has changed very rapidly and unpredictably. Complicated world economy, unstable political situation in the Middle East has many potential factors that threaten the stability and growth of the global economy. This situation will impact negatively on the economy of our country.
In the country, prices of some items for production such as petrol, oil, gas… increased highly which dragged increase in other essential goods; complicated disease occured in many places throughout the country, information caused negative impact on the psychology of consumers, such as lean meat, toxic substances in fish, bird, etc. . These were difficulties, challenges for service development in our country.
On the other hand, in 2012, service sector should continue to implement policies in the spirit of Conclusion No. 02 of the Politburo, the Conclusion of the Third Central Conference, Resolution No.11 of the Government in accordance with domestic as well as international situation and Resolution No. 01/NQ-CHINH PHU issued on January 3rd, 2012 by the Government on the key measures to direct and manage for implementing socio-economic development plan and State budget estimate in 2012; contributing to create activeness for stabilizing macro economy to set the premise for following years, taking advantages from the favorable conditions of the world economy, developing internal resources.
With the overall objectives of the 2012 are: To give priority to curb inflation, stabilize the macro economy, maintain growth at a reasonable level associated with renewing the growth model and restructuring the economy, improve quality, efficiency and competitiveness; to ensure social welfare, social security and improve people's lives; to keep political stability, national defense, security, social order and safety; to heighten the effectiveness of foreign affairs and international integration. It can be said that 2012 is a pivotal year to complete the objectives of the following years for the service sector.
1.2 Solutions to service development
a) To complete and implement the Action Plan to implement the Overall Strategy for developing service sector of Vietnam to 2020 focusing on guiding the relevant units to implement the Action Plan of the Overall Strategy for developing service sector of Vietnam to 2020;
b) To raise awareness of the service sector: setting up to submit to the Prime Minister for approval and initially implement the program on raising awareness of the service sector (including communications campaigns, social movement, activities to raise awareness in relevant agencies, localities and industry associations);
c) Completion of legal framework, development policies of service sector:
- To review the legal system relating to the service in order to ensure to avoid overlapping and comply with international agreements on services;
- To develop and adopt or adjust the strategy, development planning of key service areas;
- To build and apply classification criteria and service standards;
d) Improvement of the role of the state in managing service development together with the organization of state management apparatus on services to meet the practical needs in the future.
e) Development of human resources meeting requirements of dynamic and modern service sector
- To establish and organize labor market efficiently; to well solve problems of using labors from conception, mode, benefits…;
- To develop broad education and training service network with the participation of the private sector in providing these services;
- To have measures and policies to ensure information and promote training of basic skills in founding, managing and operating service activities, communication skills, foreign languages…;
- To promote, encourage regular training activities thanks to the dynamic, changing nature of the service sector;
- To have policy on attracting FDI in the field of training, improving qualifications, skills for human resources in the country.
f) Improvement of productivity, promotion of competition and continuous opening of service sector
- To continue equatization and restructuring of state-owned enterprises not operating in naturally proprietary markets or fields related to national defense and security or plain public service;
- To put state-owned enterprises and other units into the adjustment of povisions of Government procurement for services;
- To have policies on buying business support services and other services through competitive bidding rather than giving priority to State businesses. This will create more opportunities for private service businesses to expand their business activities;
- To build roadmap to gradually eliminate legal barriers to the service sector, in compliance with the trend of the modern market economy and more increasing level of regionalization and globalization.
g) Promotion of service export and increase of international integration on services through:
- To provide services for foreign visitors to Vietnam;
- To provide services for foreign vehicles in temporarily transiting through Vietnam;
- To promote the provision of business support services for both export and import through the development of means of airway and waterway transport; To improve insurance and financial capacity for trade;
- To promote the provision of services for foreign investors in Vietnam;
- To promote the provision of electronic services in Vietnam for foreign customers; To promote the provision of temporary labor service in Vietnam for foreign customers;
- To encourage greater investment in the service sector abroad; To promote the provision of services for foreign customers through Vietnamese companies abroad (to support service export of companies operating in fields such as construction, transportation, architecture, entertainment, restaurants, etc…)
h) Resource solutions:
- The State supports investment from the state budget to the development of the service sector, in which focusing on prioritized service sectors or identified as the key sector as above, which can be implemented through the national target program and (or) investment support by targets.
- To give priority to use ODA for developing infrastructure systems of service sector;
- To develop the policy on mobilizing resources of the private sector; to expand to attract to indirect investment through capital markets for service development;
- To continue to complete the regulations on foreign direct investment (FDI) in the service sector in order to attract, develop this capital source effectively, at the same time, research to build new models along with the specific guidelines in order to attract more foreign direct investment in key service areas, the areas encouraged to develop, ensure efficiency and the interests of investors, state and service users;
- To implement the model of Public - Private Partnership (PPP) in the provision of services, especially public services.
2. Management of Export and import
Boosting exports
To maintain the export growth rate achieved in 2011, striving to achieve a turnover of US$109.5 billion, it is necessary to focus on the following measures:
- To focus on improving quality in order to increase the value of with traditional production team (especially agriculture, forestry and aquatic products) which do not have favorable conditions to significant increase in volume. To expand production scale, innovate equipment and technology, boost production and export of items with large turnover, high capacity of growth making important contributions to export plan, employment settlement, and social stability;
- To improve the quality of trade promotion, expand market, boost production and export of groups of items which do not limit production capacity and use local materials. Increase funding for national trade promotion program;
- To exploit in-depth, width of traditional markets along with markets with common border. To promote the information and forecasts with foreign markets, early detect and have measures to overcome the technical barriers;
- To give priority to credit supply, ensure sufficient capital for farmers and businesses purchasing raw materials to produce export goods; To encourage businesses to diversify foreign exchange in transactions. To provide regulations so that commercial banks may ensure interest rates for production and export business to borrow as prescribed without arisen costs;
- The poor quality of export support services such as transportation, insurance, logistics in Vietnam is currently limiting the promotion of export. These issues need to be focused to improve in the short term.
b. Control of import
- To continue to implement a series of measures for stabilizing the market to ensure the balance between supply and demand of essential commodities on the basis of improving quality of forecasting and warning market situation. To coordinate with Associations, Ministries, and Sectors to assess the demand for import of goods and the ability to meet domestic production to have specific restrictions on each item;
- To ensure to import adequate goods meeting the needs of production and export...
3. Development of domestic markets
3.1. General solutions
a. Solutions to ensure supply and demands of goods
- Tocapture on time the developments of markets, exactly and early forecast situations which may happen to take measures on time and effectively;
- Provinces and cities continue to implement measures to ensure supply sources and stabilize prices for the first time in 2012.
-Totight management, check of markets, handle on time and strictly cases of violations in tradel activities;
- To well perform the market regulation; ensure fair distribution of goods between regions so that commodity shortages do not occur locally in some places, especially essential goods such as food, petrol and oil, iron and steel…;
- To continue to take goods to rural and remote areas to expand the market and improve the market share of domestic commodities;
- To continue to well exploit production capacity and market demand in the country, boost export to markets;
- To accelerate the completion of production investment and development projects of essential goods to put into operation, create supply sources to meet the needs of the market;
- To submit the Government in a timely manner plans on food supply and the state means of search and rescue reserve for localilites, especially provinces in the central region to support to remedy on time consequences of natural disasters, and ensure social security.
b. Measures for price stabilization
- To continue to implement strictly, drastically directions of the Government at Resolution No.11/NQ-CP on the 06 groups of measures to curb inflation, stabilize the macro economy and ensure social security in the final months of 2011;
- To continue to implement price stabilization programs, especially in the two biggest cities including Hanoi and Ho Chi Minh City. These two cities have the largest number of price index in the country; therefore, the stabilization of these two cities will contribute to the decision in stabilizing prices in the whole country.
- In big cities, especially in Hanoi and Ho Chi Minh should continue to expand the promotion, discount programs which have upheld their effectiveness over the past time in order to stimulate consumption, create motivation for domestic production and distribution businesses;
- To closely manage the provision of information, detect and strictly settle cases of launching rumors, causing psychological confusion among the people, making bad price fluctuations, affecting macroeconomic stability objectives of the Government;
- To calculate route of price increase of input items of manufacturing industries such as petrol and oil, electricity and coal at appropriate points to follow market signals as well as avoid causing pressure on prices for other items;
- The Ministry of Industry and Trade collaborates with relevant ministries, sectors and localities to drastically direct state-owned enterprises, avoid price increase. To frequently check, supervise and speed up to immediately detect and handle cases of violation;
- The Ministry of Finance needs to coordinate with relevant ministries and sectors to research, adjust tax policies so as to be appropriate, timely contributing to price stabilization, trade deficit curb;
- To control price registration, price declaration, and disclosure of information on price. To check the compliance with the State law on prices;
- To continue to implement measures to support enterprises in terms of capital, market expansion, administrative procedures ... to help businesses store goods, prepare enough goods to meet the needs of consumers in holidays;
- Ministries direct Corporations and enterprises to implement many measures to reduce costs, improve productivity, reduce consumption rate which helps to lower prices of products;
- To further promote the implementation of the campaign "Vietnamese give priority to use Vietnamese goods" through encouraging and supporting businesses to actively take goods to rural and remote areas in order to expand and establish a solid market for goods produced in the country.
3.2. Solutions to essential items
a) Petrol and oil
- The Ministry of Industry and Trade collaborates with relevant units to inspect and monitor to ensure the balance of supply and demand of domestic petrol and oil with stable prices;
- To inspect and monitor the quality of petrol and oil supplied in the market to ensure the safety for vehicles.
b) Iron and steel
- To continue to promote steel export;
- To construct technical barriers to prevent cheap steel with poor quality from penetrating in the domestic market.
c) Fertilizer
- Businesses need to actively prepare for sources of items to ensure to meet the demand, avoid sudden price increase, especially when entering the peak season;
- To enhance transport capacity to ensure the supply of fertilizer among regions, areas smoothly;
- To closely monitor fertilizer prices in the world to take measures for import regulation and appropriate production, avoid the lack of fertilizer causing local price escalation, which affects agricultural production;
- To strengthen customs work at border gates, especially in the North to reduce smuggling of fertilizer through unofficial cross-border.
d) Cement
- Promote export activities to markets of China, Bangladesh, Indonesia, some African countries and countries in the ASEAN region and continue to seek, expand market to other countries./.
Ministry of Planning and Investment