Report of Department of Service Economy – Ministry of Planning and Investment in 23rd January 2012.
I. GENERAL SITUATION
1. World situation
In February 2012, the world economy has continued to face many challenges when the debt crisis in Greece has not had many positive signals. Greece need to perform 3 conditions required by the European Union to get new aid, in which the most important one was that the Greek National Assembly has to ratify measures to "tighten their belts" in a more drastic way. News related to the rescue of Greece and US-Iran tensions has become the dominant factors affecting commodity prices on world markets last month.
2. Domestic situation
2012 is the second year implementing social and economic development plan in 2011-2015, the Government, ministries, sectors and localities determined and attempted to conduct the GDP growthtarget from 6-6,5% and inflation below 10%. In February, besides the positive results in the production and business of some large enterprises, interest rates remain stable and showing signs of decline, domestic economy has faced difficulties by rise in food prices, bird flu on a large scale ...impacting on the food supply. This is an important factor affecting the evolution of domestic market prices.
II. PERFORMANCE EVALUATION OF FEBRUARY 2012
1. The situation of tourism development
In February 2012, there were a lot of tours to festivals, especially the major festivals in the North.This year, according to travel companies in Hanoi, festival tourism has sudden growth even “out oftour” situation in a number of companies.
To explain the above problem, the travel companies in Hanoi, said that when social and economic life is gradually improved, the mental, belief activities increase accordingly. Besides, the festivalorganising is deployed on a better way, partly meet the needs of visitors. Also, with the professionalization of the organization of tourist companies, people also change their habits to book a tour instead of going themselves. Therefore, the number of tourists booking festival tours in recent years have dramatically changed. Surveys showed that the booking of tour companies have increased greatly such as: Ha Noi Vietravel Company up 20% over the same period last year. Also in GoldenTour Travel Center, from the Lunar New Year so far has served about 3,000 visitors, and this increase is considered a sudden change over the previous year. However, the festival season usually ends in late March so festival visitors booking through travel companies continues to increase.
With this type of tourism, tours are usually designed to last a day, a few 2 day matching against time and the spending of travelers. Therefore, visitors can choose the places and the departure time with 450 thousand to over 1 million dong; combining with sightseeing. Popular tour is the Perfume Pagoda (1 day), Tran Temple – Giay Palace (1 day), Yen Tu (1 day), Yen Tu - Ha Long - Cua Ong (2 days), Bai Dinh – Trang An (1 days), Tay Thien (1 day), Lang Son – Mau Temple (1 day).
Hanoi Red Tour Joint-stock Company has deployed series of spring tour combining the pagoda visiting in the East - North West, enabling visitors to discover the beauty the northern mountains. Some tours of Hanoi Red Tour attracting tourists are Ha Giang - Rocky Highland, Mai Chau - Moc Chau, Bac Can - Cao Bang - Lang Son, Sa Pa ...
After years of decline, cruise tourism is gradually stabilizing and promising growth in 2012. Only in February, many ships of international tourists to Vietnam included: cruise ship AIDA DIVA (Italian citizens) from Brunei bring 2,038 tourists and 596 crew, staff landing at SITV Phu My port (Tan Thanh District), Columbus international cruise liner (Germany) with 550 tourists and crews mostly German nationality arriving to Vietnam via the route Danang - Hai Phong, cruise liners Costa Classica and SuperStar with more than 4,000 tourists and crews on voyages of one-day Halong visit... Also, in February, Costa Classica will continue to visit Ha Long on days of Feb 13, 17, 21 and 29 and SuperStar Aquarius of luxury ship fleet owned by Star Cruises, has 07 trips coming to Chan May port (Thua Thien-Hue Province) and Tien Sa (Da Nang), during the period from 14/2 to 5/3.
International visitors to Vietnam in February was estimated at 620,000 arrivals, increasing 14.3% over the same period last year, of which arrivals for tourism purposes, relaxation reached 360 thousand people, up 7.6% ; for business at 105 thousand people, up 14.1%; for visiting relatives to 115 thousand, up 25%; for other purposes reached 35 thousand, up 9%.
Countries and territories which have an high increase in number of visitors into Vietnam in the month over the same period in 2011 were: China, up 90.4%, South Korea, up 17%, U.S., up 24.4% ….
2. Export and import of goods
a. Export
Exports in February 2012 was expected to reach US$8.2 billion, up 15.6% over the previous month, in which export of the enterprises with foreign direct investment (excluding crude oil) was estimated at US$4.6 billion.
In the first 2 months of 2012, total export turnover reached nearly US$15.3 billion, up 24.8% over the same period last year; of which, exports by enterprises with foreign direct investment (excluding crude oil) is estimated at nearly $ 8.6 billion, up 49.2% over the same period last year.
Export of some major items in the first 2 months of 2012 over the same period last year is as follows: crude oil was estimated at 1,114 thousand tons, down 16.8% in volume and 1.1% in turnover; coal was at an estimation of 1,664 thousand tons, up 89.3% in volume and 34.5% in turnover; textile and garment reached nearly US$2.18 billion, up 25.4%; footwear obtained over US$1.04 billion, up 21.1%; rubber 180 thousand tons, up 48.8% in volume and down 5.8% in turnover; wood and wood products reached US$589 million, up 19.2%; electronic components US$856 million, up 61, 8%; aquatic products US$783 million, up 15.7%; rice 556 thousand tons, down 46% in volume and 43% in turnover; coffee 292 thousand tons, down 18.7% in volume and 17.5 % in turnover; cassava and cassava products reached 596 thousand tons, down 10.2% in volume and 15.8% in turnover ...
Prices of many exported commodities hardly changed over the same period in 2011, prices of some exported products plummeted such as: coal prices down 29%, rubber down 36.7%, cassava and cassava products down 6.3%. Price reduction factor alone of these items caused export turnover decrease US$154 million.
As for the export market, export into the U.S. market was expected to increase 28% and accounted for 17.6%, export into EU increased 29.4% and accounted for 18.2%, export into ASEAN increased by 20.3% and accounted for 13.8%, export into Japan increased 48.3% and accounted for 12.1%, export into China increased 4.2% and accounted for 9.3%.
b. Imports
The import turnover in February 2012 was estimated at US$9 billion, up 30% from the previous month due to import in January was affected by Lunar New Year; in which, import of foreign invested enterprises was estimated at US$4.6 billion.
In the first 2 months of 2012, total import turnover was an estimation of over US$15.9 billion, up 11.8% over the same period last year; of which, import of foreign invested enterprises reached over US$8.2 billion, up 36.8%.
The volume and turnover of import in some major items in the first 2 months of 2012 compared to same period last year is as follows: gas and petrol 1,322 thousand tons, down 31.6% in volume and 19.02% in turnover; iron and steel 1,210 thousand tons, up 14.9% in volume and 16.7% in turnover; fertilizers 439 thousand tons, down 1.1% in volume and up 14.3% in turnover; types of paper 172 thousand tons, up 4.2% in volume and 6.5% in turnover; plastic materials 412 thousand tons, up 14.4% in volume and 9.3% in turnover; machinery and equipments nearly US$2.3 billion, up 4.2%, computer and spare parts US$1,693 million, up 101.3%, types of fabric US$882 million, up 4.5%, textile and garment materials US$387 million , up 9.6% ...
The average import price of most items increased slightly. Prices of some main imports increased over the same period last year include: fertilizer price increased 15.6%, motorcycle parts 12.7%, paper of all types 2.1%, steel 1.5%, spare parts, automobile parts 4.6%. Price increase factor alone of these comodities made import turnover up about $ 86 million.
In 2 months of 2012, imports from Asia accounted for over 79.5% of total import turnover of Vietnam. The main import markets are China (import turnover from this market increased by 22%, the proportion was estimated at 23.5%), ASEAN (up 6.6%, the proportion of nearly 18.8%), Korea (up 35.6%, accounting for 15.1%), Japan (up 6.3%, accounting for 9.4%) and EU (up 30.5%, accounting for nearly 7,7%).
Trade deficits in the first 2 months of 2012 was estimated at US$628 million, accounting for over 4.1% of export turnover. In which, trade surplus of foreign invested enterprises (excluding crude oil) reached US$360 million.
In the first 2 months of 2012, Vietnam has trade deficits with major countries like China (estimate of US$2.3 billion), ASEAN (nearly US$873.8 million), Korea (nearly US$1.6 billion), Taiwan (US$801 million).
3. Development of domestic market
3.1. Total turnover of retail goods and revenue of consumer services
According to the data from General Statistics Office, the total turnover of retail goods and revenue of consumer services (referred to as total retail sales) in Feb 2012 was estimated at about 186.4 billion dong, decreased 3.79 % compared to Jan 2012 and increased about 22% over the same period in 2011.
Among economic sectors, the individual economy accounted for the largest share with 49.5%, followed by the private sector and state sector with the proportion of 34.7 % and 11.6% respectively. The contribution value of economic sector with foreign investment reached 3%, while the collective sector accounted for 1.2%.
3.2. Consumer Price Index
According to the forecasting of Department of Service Economy, the consumer price index (CPI) in Feb 2012 increased 1.3% compared to Jan 2012. Groups expected to increase strongly in price include: garment, headwear, footwear; housing and construction materials; culture, entertainment and tourism and food and food services. The price increase of commodity groups was mainly due to the rise of shopping needs of the people during Tet and food prices.
3.3. The situation of supply - demand, prices of essential commodities
a) Gas and Petrol
Crude oil price on world market in the first half of Feb 2012 increased continuously due to stress on Iran nuclear issue, accompanying with the positive economic news broadcasting from the U.S. and China – the world’s two largest fuel consumers. Over the same period of Jan 2012, average price of two types of oil had different change, while WTI oil was US$98.88/barrel, down US$2.43/barrel (2.40%), the Brent oil was US$116.06/barrel, up US$3.76/barrel (3.35%).
The internal gasoline retail price remained stable.
According to preliminary data of the General Administration of Customs, the import of petroleum in Feb 2012 was estimated at 750 thousand tons, worth about US$725 million, up 31% compared to Jan 2012.
b) Iron and steel
In 2011, steel consumption decreased by 10% compared to 2010. In 2012, there was a prediction that the steel industry would face many difficulties due to public investment continued to be tightened, the steel-intensive industries such as shipbuilding, machine building with low growth, the real estate market with no signs of recovery.
According to Vietnam Steel Association, steel industry growth will only reach 3-4% over 2011.
According to preliminary statistics of the General Department of Customs, the import of steel in Feb 2012 reached 700 thousand tons worth US$540 million, up 37% compared to Jan 2012, in which the imported bloom reached 40 thousand tons, worth US$26 million, up 29% from the previous month.
c) Cement
According to the Ministry of Construction, in Jan 2012 total production of cement was estimated at 2.92 million tons, equaling 5.3% of the yearly plan, consumption was estimated at 2.85 million tons, equaling 5.2%. Import in Jan was estimated reaching 50 thousand tons of clinker and export about 250,000 tons of cement and clinker.
In February, production of cement predictably reached 3 million tons, up 3% compared with January, consumption was estimated at 2.9 million tons, up slightly from the previous month.
In 2011, the entire cement industry produced and consumed 49.3 million tons, imported 1.15 million tons of clinker, also exported about 5.5 million tons of clinker and cement.
Based on forecast in capital investment plan 2012 and the development investment policies, Ministry of Construction has calculated the demand for cement in 2012 at about 55 to 56.5 million tons, up 11-12% compared to 2011.
d) Fertilizer
In February, fertilizer demand for winter-spring cultivation in the South was relatively high, while in the North, people basically finished sowing. Therefore, fertilizer demand was still high, but due to an abundant supply, fertilizer market remains quiet, not as deficient as the previous year. However, compared to the previous years, the fertilizer price is relatively high because of an increase in input costs such as prices of electricity, gas ... Phu My urea price in An Giang market was at 10,300 VND/kg, in Bac Lieu and Ca Mau at 10,200 VND/kg and 10,400 VND/kg and in Hanoi at 11,000 VND/kg.
In Feb 2012, fertilizer was estimated to import 280 thousand tons with a value of US$115 million; of which urea was 40 thousand tons, worth US$16 million.
II. PROPOSED SOLUTIONS TO IMPROVE PERFORMANCE OF PLAN EXECUTION IN 2012
1. Development of tourism industry
Solutions for development of tourism industry include:
- To research and develop new forms of travel such as MICE (travel combining with reward, conferences, surveys, team building ...), adventure tourism, scientific tourism, eco-tourism…;
- To focus on supporting and incentive policy for those travelers by sea on the visa, on-shore time, the distance allowed to go further inland ...;
- To strengthen inspection and control on traveling business, ensure security and safety for internal and external tourists;
- To coordinate with related ministries, sectors and localities to integrate programs, projects to protect cultural and historical relics, ecological environment, entertainment associated with tourism,... in tourism areas, parks and spots in order to promote human resources, improve the quality of tourism products to attract foreign visitors;
- To encourage domestic and foreign investors to develop resort complexes to attract and meet demand of tourists;
- To strengthen coordination between the Ministries, sectors, localities and enterprises in focusing on the development of service quality;
- To develop the system of hotels and restaurants, especially, 4-5 star hotels with international standard, focusing mainly on the tourism centers, the national tourism zones to meet the diverse needs of tourists.
2. Export-import monitoring
Solutions for export-import monitoring are:
- To effectively implement master plans of sector development, accelerate process of projects produced industrial products for export in order to replace a number of agricultural products or minerals which can likely reduce or stabilize export production (such as rice, coffee, pepper, coal, crude oil, ...) and largely imported products (such as paper, fertilizer, steel plates, textile, garment and footwear materials, ...) with new products such as mechanics, electrical wires and cables, electronic components, machinery, ...
- To develop supporting industries through policies to encourage the development of auxiliary industries, focusing on the textile and garment, footwear, electronics, mechanical engineering.
- To develop training programs, solve the lack and improve the quality of the workforce in some export industries facing difficulties on the workforce such as textile and garment, footwear, wood products, plastic products, mechanical and electronic products, ...
- To develop, review of logistics services, establish strategies to reduce logistics cost in order to help improve the efficiency of import-export activities.
3. The development of the domestic market
3.1. General solutions
a. The measures to ensure the supply - demand of goods are:
- To respond timely the evolution of the market, early and correctly predicting possible situations for well-timed and effective solutions;
- The provinces and cities to continue to implement measures in order to ensure supply sources, stabilize prices for the beginning of 2012;
- To tighten the management, market examination; timely and strictly handling violations in commercial activities;
- To well regulate market to ensure fair distribution of goods between regions, avoiding the lack of goods locally in some places, especially essential goods such as food, petroleum, iron and steel, ...
- To continue distributing goods to rural, secluded and remote areas to expand markets and raise market share of domestic goods;
- To further exploit production capacity and domestic demand, boost export to the markets;
- To accelerate the completion of investment projects to develop production of essential goods and put into operation, creating enough supply for market needs;
- To timely submit to the Government plan of providing food and other reserve means of seeking and rescue for the local authorities, especially the central provinces to support the timely redress of natural disasters, ensuring social security.
b. The measures to stabilize prices include:
- To continue implementing seriously and drastically the Government's direction in Resolution 11/NQ-CP on 06 groups of measures to curb inflation, stabilize macro-economy and ensure social security in the last months of 2011;
- To continue conducting programs of stabilizing prices, especially in two major cities of Hanoi and Ho Chi Minh, which have the greatest weights in the whole country in calculating price index so their stabilization would contribute determinatively to price stabilization within the country;
- To continue expanding in the large cities, especially Hanoi and Ho Chi Minh City, promotion and discount programs proven effective in recent periods in order to stimulate consumption and create motivations for domestic producers and distributors;
- To keep close control of information dissemination to detect and strictly handle cases launching false rumors, causing panic in people, creating bad price fluctuations, affecting target of Government of macroeconomic stabilization;
- To calculate the route of increasing the prices of commodities being inputs of the manufacturing industries such as petroleum, electricity and coal at the appropriate time following the market signals without causing pressure on prices for other goods;
- Ministry of Industry and Trade to coordinate with the related ministries, sectors and localities to direct drastically the state enterprises, to ensure no price increase; to check and urge regularly to detect and immediately resolve the violations;
- Ministry of Finance to coordinate with related ministries, sectors to research, adjust tax policy efficiently and promptly in order to stabilize prices, reduce trade deficit;
- To control the price registration, publicity of price, declaration of information about price; examine compliance of state laws on prices;
- To continue implementing measures to support enterprises in capital, market expand, administrative procedures ... to help businesses reserving goods, preparing enough goods for demands of the holidays;
- The line ministries to direct the corporations and enterprises to implement measures to reduce costs, improve productivity, decline cost norms which helps lower products’ prices;
- To continue promoting implementation of the campaign "Vietnamese prioritize Vietnamese products" by encouraging and supporting businesses to actively take their goods to the rural, remote areas in order to expand and establish solid market for locally-made goods.
3.2. Solutions for key commodities
Solutions for key commodities include:
a) With regard to petrol
- Ministry of Industry and Trade to coordinate with the related units to inspect and supervise, ensure balance of petroleum supply-demand with stable prices;
- To inspect, supervise the quality of gasoline supplied in the market, ensuring the safety of used vehicles;
b) Regarding iron and steel
- To promote the export of steel;
- To develop technical barriers to limit the cheap and poor quality steel penetrating the domestic market;
c) As regards fertilizer
- To encourage enterprises actively preparing to ensure satisfying demand, preventing price hike, especially when entering the peak season;
- To strengthen transport capacity, ensuring the smooth supply for fertilizer between regions;
d) As for cement
- To closely monitor world fertilizer prices for methods to regulate import and production consistently, without the lack of fertilizer causing locally high prices, affecting agricultural production;
- To strengthen customs at borders, especially in the North to reduce smuggling of fertilizer by cross-border trade. /.
Ministry of Planning and Investment