Vietnam’s socio-economic situation in the first six months of 2015 was in the context that the world economy was forecast to continue to rebound, but unsustainably with varying growth rates among regions, partly due to the fall in oil prices and other commodity prices, which affected regions at different levels. The US economy, the world’s largest economy, continued to grow stronger thanks to increased local market demand, particularly consumer demand. Most emerging economies benefited from lower oil prices, increased global liquidity and the acceleration of the US economy and Europe. Meanwhile, other leading economies reported slow growth and continued to face significant challenges due to the impact of the global financial crisis such as reduced number of jobs caused by weaker aggregate demand, increased private and public debt and the volatility of the financial sector. In the country, falling petroleum prices strongly supported local businesses and stimulated consumption. The policies issued in 2014 and early 2015 showed their effect and created conditions for the business sector to overcome difficulties. Sectors, industries and localities across the country took advantage of local and international favorable conditions and well implemented guiding documents of the National Assembly and the Government with the focus being the Resolution No. 01/NQ-CP dated January 3, 2015 of the Government on major tasks and solutions guiding the realization of the socio-economic development plan and State budget estimates in 2015. Specific production and business results in the first six months are as follows:

ECONOMIC GROWTH

Gross domestic product (GDP) growth

GDP in the first six months of 2015 was estimated to increase by 6.28% YoY, of which the growth rate was 6.08% in QI and 6.44% in QII. Of the 6.28% growth of the entire economy, the agriculture, forestry and fishery rose by 2.36%, contributing 0.42 percentage points; the industry and construction sector by 9.09%, contributing 2.98 percentages points; the service sector by 5.90%, contributing 2.22 percentage points.

In the agriculture, forestry and fishery sector, the forestry industry reported the highest growth rate of 8.07% and contributed 0.05 percentage points to the overall growth; agriculture rose at a low level of 1.90% and contributed 0.27 percentage points; fishery increased by 3.30% and contributed 0.10 percentage points.

In the industry and construction sector, the industry sector soared by 9.53% over the same period last year, much higher than the growth of the same period of some previous years[i], of which the processing and manufacturing industry achieved a high growth rate of 9.95%[ii], making an important contribution to the overall growth (contributing 1.57 percentage points); the mining industry increased by 8.18% (it fell by 1.13% in the same period last year). The construction industry rose by 6.60%, slightly higher than the 6.11% growth of the same period of 2014.

In the service sector, the growth of the industries with large proportions was as follows: Wholesale and retail increased by 8.35% YoY; accommodation and catering by 2.90%; finance, banking and insurance by 5.85%. The growth of the real estate business industry was improved with an increase of 2.72%, higher than the 2.51% increased of the same period last year as driven by positive signs: the real estate market started to warm up, the rate of successful real estate transactions rose, bank interest rates continued to fall while conditions for home loans were relaxed.

Concerning the structure of the economy in the first six months of this year, the agriculture, forestry and fishery sector made up 16.73%; the industry and construction sector 33.45%; the service sector 39.61%; taxes on products net of subsidies on products 10.21%.

With regard to the use of GDP in the first six months of the year, final consumption surged by 8.70% from the same period of 2014 and contributed 7.74 percentage points to the overall growth; accumulated assets by 6.85%, contributing 2.25 percentage points; balance of import and export reduced 3.71 percentage points of the overall growth.

Agriculture, forestry and fishery

Agriculture

The country cultivated 3,112.2 thousand hectares of winter-spring rice, 4.3 thousand hectares lower as compared with the same crop last year, of which the cultivated area in the North was 1,161.8 thousand hectares, nearly equal to the same crop of 2014; in the South was 1,950.4 thousand hectares, down 0.2%. According to preliminary reports, the winter-spring rice yield this year across the country was estimated at 66.5 quintals/ha, 0.4 quintals/ha lower than the winter-spring crop of 2014; rice output reached 20.7 million tons, 153.3 thousand tons lower than the winter-spring crop of 2014. Winter-spring rice production this year decreased as compared with the previous winter-spring crop in terms of area, yield and output mainly due to prolonged heat and drought and salinized rice fields in some localities.

As of June 15, northern provinces harvested 1,045.5 thousand ha of winter-spring rice with the estimated rice yield of 62.1 quintals/ha, down 0.3 quintals/ha as compared with the 2014 winter-spring crop while rice output reached 7.2 million tons, 36.5 thousand tons lower. Particularly, because of the land regrouping policy in the Red River Delta region, part of the rice growing area was converted into other crops and the rice cultivation area decreased by 5.4 thousand hectares and rice output reached 3.6 million tons, 15 thousand tons lower than the same period last year. Most southern provinces finished the harvesting of the winter-spring rice crop with an estimated rice output of 13.5 million tons, 116.8 thousand tons lower than the 2014 winter-spring crop. Rice output of the Mekong Delta region totaled 11.1 million tons, 61 thousand tons lower than the previous winter-spring crop due to hot weather and pest outbreaks. Some provinces recorded reduced rice output as compared with the same period last year: rice output of Dong Thap decreased by 53.8 thousand tons; An Giang by 32.8 thousand tons.

Along with the harvesting of the winter-spring rice crop, as of mid-June, localities across the country cultivated 1851.4 thousand hectares of summer-autumn rice fields, equal to 93.6% of the same period last year, while the cultivation area of the Mekong Delta region reached 1,477, 9 thousand ha, equaling 92.1% of the same period of 2014. The early harvested area of the summer-autumn rice crop totaled 220.6 thousand hectares, equivalent to 107% of the same period last year.

Some other winter-spring crops were almost harvested. The output of maize reached 2.5 million tons, 43.3 thousand tons lower than the previous year; potato 856.9 thousand tons, 14.7 thousand tons higher; soybeans 77.6 thousand tons, 4.7 thousand tons lower; peanuts 354.6 thousand tons, 4.6 thousand tons higher; vegetables 8.6 million tons, 244 thousand tons higher.

According to reports from localities, the output of some perennials and fruit trees was higher than the same period last year: The output of tea reached 442 thousand tons, up 2.4%; rubber 315 thousand tons, up 0.6%; pepper 126 thousand tons, up 5.4%; cashew nuts 336 thousand tons, up 1%; Orange 249 thousand tons, up 1.4%; Especially litchi output this year reached a high level of 350.7 thousand tons, up 14%.

According to the survey conducted as of April 1, 2015, the country had 27.2 million pigs, up 2.9% as compared with the same period of 2014; 327.1 million poultries, up 4%. Cattle raising in the first six months was relatively stable. The country had 2.6 million buffalos, down 0.4% YoY; 5.3 million cows, up 2.7%; dairy cows 253.7 thousand, up 26.5%. The output of live-weight buffalo meat for slaughter in the first six months was estimated at 49.9 thousand tons, up 0.8% over the same period last year; the output of live-weight beef for slaughter was estimated at 179.8 thousand steam tons, up 1.9%; fresh milk output 355.2 thousand tons, up 24.4%; the output of live-weight pork for slaughter 2.05 million tons, up 3.9%; the output of poultry 515.9 thousand tons, up 4.5%; the output of poultry eggs 4.9 million, up 6.8%.

As of June 21, 2015, the blue ear disease outbreak was controlled; Other diseases over the last 21 days in localities included HPAI in Dak Lak and foot and mouth disease in Quang Nam and Bac Kan.

Forestry

The total concentrated afforestation area in the first six months was estimated at 85 thousand hectares, representing a YoY increase of 19%. Some provinces reported high concentrated afforestation area, including Quang Ninh with 10.7 thousand hectares, up 3.6%; Ha Giang 8 thousand hectares, up 60%; Thai Nguyen 6.1 thousand hectares, up 77.4%; Bac Kan 5.6 thousand hectares, up 10.2%. The rise in the concentrated afforestation area was attributed on the one hand to the increased demand for wood for production and consumption and on the other hand to the fact that forestry businesses collaborated with households through economic contracts, technical assistance during afforestation and product consumption. The attended afforestation area reached 360 thousand hectares in the period, up 16.2% YoY. The reforestation area totaled 604.7 thousand hectares, down 0.5%. The allocated forest area was 4,805.2 thousand hectares, down 2.7%. The number of dispersedly planted trees totaled 111 million, up 0.3%.

Wood production in localities increased significantly over the same period last year. Wood production in the first six months reached 3470 thousand m³, an increase of 11.7% over the same period of 2014; Firewood production totaled 14.9 million stes, up 1.7%. Some provinces posted high wood production, including Quang Nam with 372 thousand m³ up 6.6%, Quang Ninh 344 thousand m³, 16.3%, Binh Dinh 296 thousand m³, up 29%; Tuyen Quang 188 thousand m³, representing an increase of 24.8%. The increase in the wood production was primarily due to higher demand for raw materials for production, export and consumption.

Forest protection continued to be prioritized with a series of fire prevention & firefighting measures being applied in order to minimize damages. However, due to prolonged heat, forest fires still occurred in some localities. In the first six months, the destroyed forest area was 842 hectares, down 30.9% from the same period last year, of which the burned forest area totaled 556 hectares, down 38.1% while the destroyed forest area reached 286 hectares, down 11%. Some localities reported high burned forest area, including Dak Lak with 176 hectares; Yen Bai 142 ha; Ha Giang 99 ha. Some provinces recorded high destroyed forest area, including Dak Nong with 134 ha; Lam Dong 64 ha and Dien Bien 41 ha.

Fishery

Fishing production in the first six months of the year was estimated at 3,071.5 thousand tons, up 3.8% YoY, of which there were 2,260.7 thousand tons of fish, up 3.3% and 314 thousand tons of shrimp, down 2.5%.

The aquatic production area in the first six months was estimated at 921 thousand hectares, down 0.8% YoY, of which the fish breeding area reached 262 thousand hectares, up 1% while the shrimp farming area totaled 602.3 thousand hectares, down 2.5%. Aquaculture production in the six months was estimated at 1,574.8 thousand tons, up 3.3% from the same period last year, including 1,178.4 thousand tons of fish, up 2.4% and 236 thousand tons of shrimp, down 2.5%.

Tra fish exports in the early months encountered difficulties as the US dollar rose against some other currencies, which caused the import market to shrink, while fish exports were still subject to high tariffs. The tra fish farming area in the Mekong Delta region was estimated at 3,975 hectares, down 6% YoY. Some provinces reported reduced tra fish farming area, including An Giang with 768 ha, down 0.3%; Can Tho 650 hectares, down 10%; Ben Tre 544 hectares, down 13.2%; Vinh Long 440 hectares, down 10%. Tra fish output in the first six months was estimated to reach 561 thousand tons, equivalent to the same period last year. Some localities recorded decreased tra fish production over the same period lat year, including Tien Giang with 199.8 thousand tons, down 1.3%; Ben Tre 92.6 thousand tons, down 3.7%; Vinh Long 47.2 thousand tons, down 8.5%. Some provinces had higher tra fish output as they were active in farming and seeking new markets. These included Dong Thap with 180.3 thousand tons, up 2%; An Giang 130.3 thousand tons, up 3.5%. Recently, tra fish farming in localities have been shifted towards small farming into large-scale and concentrated farming to ensure a closed cycle from production and processing to consumption in order to meet strict conditions imposed by the import market.

Shrimp farming experienced some difficulties because shrimp prices on the market plummeted while input costs tended to increase. In addition, prolonged hot weather, great difference between day and night temperatures, complicated epidemic outbreaks affected shrimp farming in localities. The area of white leg shrimp farming in the period was estimated at 46 thousand hectares, down 21% YoY. Some provinces reported a lower area of white leg shrimp farming, including Soc Trang with 15.5 thousand hectares, down 40%; Ben Tre 4.2 thousand hectares, down 16.8%; Bac Lieu 3.9 thousand hectares, down 17.8%. While leg shrimp output in the six months reached 110 thousand tons, down 5.4% YoY, which the while leg shrimp output of So Trang reached 10 thousand tons, down 13%; Ben Tre 13.9 thousand tons, down 23.9%; Bac Lieu 9.5 thousand tons, down 7.7%.

The farming area of giant tiger prawns in the first six months was estimated at 502 thousand hectares, up 3.4% YoY, including 91.5 thousand hectares in Kien Giang, up 6.6%; 75.7 thousand hectares in Bac Lieu, up 4.9%; 3.4 thousand hectares in Tien Giang, up 43%. Giant tiger prawn output in the period was estimated to reach 99.5 thousand tons, down 0.5% YoY, including 45.4 thousand tons of giant tiger prawns produced by Ca Mau, down 17%; 3 thousand tons by Tra Vinh, down 25%. Giant tiger output decreased mainly due to epidemic outbreaks, causing some localities to harvest small prawns and affecting the output. Marine farming strongly grew with the output in the first six months estimated at 120.6 thousand tons, up 24% YoY, mainly due to certain species of high economic value, including clams & oysters with 75.6 thousand tons, up 18.8%; crabs 14.2 thousand tons, up 34.5%; seabass 9.1 thousand tons, up 23.1%.

The weather was relatively favorable for marine fishing activities. Fishing output in the first six months was estimated at 1,496.7 thousand tons, up 4.4% YoY, including 1,082.3 thousand tons of fish, up 4.4%, 78 thousand tons of shrimp, down 2.5%. Marine fishing output in the months was estimated to reach 1,411 thousand tons, up 4.6% YoY, of which tuna output totaled 13.1 thousand tons, up 0.8%.

 

Industrial production

The Index of Industrial Production (IIP) in June was estimated to soar by 11.1% YoY, of which mining went up 12%; processing & manufacturing up 11%; electricity generation and supply up 9.8%; water supply and waste & wastewater treatment up 6, 4%.

Generally in the first six months, the IIP increased by 9.6% YoY (the index in QI and QII rose by 9.3% and 10.2%, respectively), higher than the growth of the same period some recent year[iii]. Of the industries, the mining industry rose by 8.2%, contributing 1.7 percentage points to the overall growth; the processing & manufacturing industry by 1 0%, contributing 7 percentage points; the electricity generation and supply industry by 11.2%, contributing 0.8 percentage points; the water supply and waste & wastewater treatment industry by 6, 4%, contributing 0.1 percentage point[iv]. Concerning the use of industrial products, in the first quarter of this year, the production index of intermediate products used for subsequent production processes increased by 8.9% YoY; products used as means of production increased by 14% (production tools recorded a high increase of 24.1% while construction materials posted a growth of 12.1%); consumer products was up 8.2%.

Some secondary industries recorded a high production index in the first six months as compared with the same period last year: Manufacturing of motor vehicles surged by 28.7%; textiles by 23.2%; leather and related products by 21.3%; manufacturing electronic products, computers and optical products by 21.1%. Some industries posted higher growth, including production of non-metallic mineral products, which rose by 12.7%; manufacturing of rubber and plastic products by 12.6%; other mining by 12.1%; electricity generation and supply by 11.2%; metal manufacturing by 10.4%; production of paper and paper products by 10.3%. Some industries posted low growth, including food production and processing, which increased by 7.6%; manufacturing of chemicals and chemical products by 7.2%; production of beverages by 5.9%; hard coal and lignite mining by 5.2%; production of beds, wardrobes, tables, chairs by 5%; production of medicines, drugs and pharmaceuticals & clothing production by 4.5%; tobacco production by 1.8%.

In the first six months of this year, some products recorded high a production index as compared with the same period of 2014: Mobile phone surged by 68.8%; cars by 57.6%; TVs of all kinds by 40.3%; leather footwear by 19.5%; aquatic feed by 19%; rolled steel by 18.2%; fresh milk by 13. 6%. Some products posted good growth: Production electricity rose by 11.8%; crude oil by 11%; chemical paints of all types by 10.9%; cement by 10.5%. Some products recorded low growth or decrease: LPG increased by 8.4%; beer by 5.6%; ordinary clothing by 5.5%; commercial water by 5.4%; processed seafood by 5.3%; coal by 3.7%; crude steel by 3.2%; refined sugar by 2.9%; NPK fertilizers by 2.6%; cigarettes by 1.7% while powdered milk decreased by 0.6% and motorcycles fell by 13.3%.

The estimated IIP in the first six months of the year as compared with the same period of 2014 of some localities are as follows: The IIP of Thai Nguyen soared by 230%; Quang Nam by 27.3%; Haiphong by 15.9%; Danang by 11.2%; Hai Duong by 9.3%; Binh Duong by 8.4%; Dong Nai by 7.9%; Can Tho 7.9%; Hanoi by 6.8%; Ho Chi Minh City by 6.4%; Quang Ninh by 5.9%; Vinh Phuc by 2.3% while Ba Ria - Vung Tau’s IIP was down 4.5%.

The consumption index of the processing & manufacturing industry in May 2015 went up 7.5% MoM and rose by 9.2% YoY. Generally, the index in the first five months increased by 12.7% YoY, higher than the 9% growth recorded in 2014. Some industries recorded a higher consumption index in the first five months of this year: Manufacturing of motor vehicles increased by 35.5%; manufacturing of electronic products; computers and optical products by 30.6%; metal production by 23.3%; textiles by 14.5%. Some industries posted a low or decreased consumption index Manufacturing of electrical equipment rose by 10.2%; clothing production by 7.4%; manufacturing of chemicals and chemical products by 5.9%; food processing & production by 5.8%; Beverage production by 5.4% while the tobacco production industry’s consumption index fell by 2.6%.

The inventory index of the processing & manufacturing industry, as of June 1, 2015 surged by 11.8% YoY, of which some industries recorded an inventory index that was lower than the overall growth or a decreased inventory index: Manufacturing of chemicals and chemical products increased by 5.7%; production of electrical equipment by 2.1%; Tobacco production by 5.6%; manufacturing of rubber and plastic products by 7.3%. Some industries had a high inventory index as compared with the overall growth: Manufacturing of electronic products, computers and optical products went up 140.4%; Beverage production up 85%; food production and processing up 45.1%; leather and related products up 44.2%; paper and paper products up 41.4%.

The average inventory index of the processing & manufacturing sector in the first five months was 77.8% with some industries recording a high inventory index: The inventory index of medicines, drugs and pharmaceuticals increased by 155%; chemical and chemical products by 124.4%; food production and processing by 99.7%.

The number of people working for industrial enterprises as of June 1, 2015 went up 5.4% YoY, while the number of workers at State-owned enterprises fell by 1.1% while the number of people working for non-state enterprises increased by 3.2% and FDI companies by 8.2%. By that time, the Labor Employed Index (LEI) at companies engaged in the mining industry dropped by 8.2% YoY while that of the processing & manufacturing industry was up 6.2% and water supply and waste & waste water treatment by 3.9% while the index of the electricity generation and supply industry remained stable.

The number of people working for industrial enterprises as of June 1, 2015 as compared with the same period last year in provinces and cities with a large industrial scale was as follows: The number of people working for industrial enterprises in Thai Nguyen rose by 61.7%; Vinh Phuc by 17.2%; Hai Duong by 13.5%; Quang Nam by 11.4%; Binh Duong by 10.4%; Quang Ngai by 6.7%; Dong Nai by 5.8%; Danang by 4.4%; Ho Chi Minh City by 2.4%; Can Tho by 0.8%; Hanoi by 0.2% while that of Haiphong was down 0.8%; Ba Ria - Vung Tau, down 1.7%; Quang Ninh down 5.2%.

 

Business activities[v]

Business registration

In June 2015, there were 9,351 new enterprises established with a registered capital of VND63.1 trillion and the average registered capital of a company is VND6.7 billion. As compared with the previous month, the number of newly established company increased by 19.6% and the amount of registered capital was up 10.9% while the average registered capital of an enterprise decreased by 7.2%. As compared with the same period last year, the number of newly founded businesses increased by 53.6% while the amount of registered capital surged by 10%. The number of employees of the newly established enterprises in June was 133 thousand, up 46.9% MoM.

In the month, as many as 1,103 companies throughout the country resumed their operations, up 1.4% MoM and 4,935 encountered difficulties and had to suspend their operations, up 19.9%, including 1,280 registered enterprises suspending their operations for a definite period and 3,655 companies were temporarily closed down waiting for closure of business codes or for non-registration; 824 enterprises completed dissolution & termination procedures, up 29.8%.

Generally, in the first six months of this year, the country had 45,406 enterprises registered for establishment with a total registered capital of VND282.4 trillion, up 21.7% in number and 22.3% in the amount of registered capital as compared with the same period last year[vi]. The average registered capital of a newly established business in the first six months of the year was VND6.2 billion, up 0.5% YoY. Besides, there was 10,988 enterprises raising their capital with the total additionally registered capital of VBD308.8 trillion. As a result, the total newly and additionally registered capital in the first six months of 2015 amounted to VND591.2 trillion. The number of jobs created by the newly established enterprises in the first six months of the year was 651.4 thousand, up 20.4% YoY.

In the first six months of the year, there were 4,708 enterprises which completed dissolution & termination procedures, representing a YoY decrease of 0.9% and most of them were small-scale businesses with a registered capital of less than VND10 billion. According to business types, among the enterprises, which completed dissolution & termination procedures, there were 1,676 one-member limited liability companies (accounting for 35.6%); 1,287 two-member limited liability companies (accounting for 27.3%); 1,044 private enterprises (accounting for 22.2%) and 701 joint-stock companies (representing 14.9%).

There were 27,051 enterprises encountering difficulties and being forced to suspend their operations in the first six months of the year, down 5.8% from the same period last year, including 8,898 enterprises registered for suspension of their operations for a definite period of time; 18,153 enterprises suspended their operations waiting for closure of company codes or without registration. Among the enterprises facing difficulties and being forced to suspend their operations, there were 9,588 one-member limited liability companies (accounting for 35.4%); 8,917 two-member limited liability companies (making up 33%); 4,746 private enterprises (occupying 17.5%) and 3,800 joint stock companies (representing 14.1%).

The number of enterprises resumed their operation in the first six months was 8,507, up 2.2% YoY. In general, the situation of companies entering the market in the first six months of this year was clearly improved as compared with the same period last year, reflecting the efforts of the business community and the effectiveness of the solutions, directions and guidelines of the Government, ministries and agencies in improving the business and investment environment and removing difficulties for enterprises.

Business trends of enterprises

The survey on business trends involving 3,389 businesses engaged in the processing & manufacturing industry showed that companies’ business trends in QII and QIII of 2015 were stable and much improved as compared with QI this year. When providing a general assessment of enterprises’ production and business situation in QII as compared with the previous quarter, 40.5% of the companies said that the production and business situation was improved; 20.1% of the companies showed difficulties and 39.4% of the businesses thought the production and business situation was stable. When forecasting the trend in QIII as compared with QII, 49.4% of the businesses said that the trend would be better; 13.2% of the companies forecast the trend would become worse and 37.4% of the businesses thought their production and business situation would be stable.

With regard to production volume, 44.3% of the companies assessed that their production volume in QII increased from the previous quarter; 19.1% of the businesses said their production volume decreased while 36.6% of the enterprises thought the production volume was stable. When projecting the production volume in QIII against QII, 52% of the companies forecast an increased production volume; 11.1% of the companies expected it to fall while 36.9% of the businesses said it would remain stable.

With respect to production orders in QII against QI, 37% of the enterprises reported a higher number of production orders; 19.2% of the companies posted a lower number of production orders while 43.8% of the businesses had a stable number of production orders. QIII’s trends were more optimistic than QII’s with 45.8% of companies expecting more orders; 10.8% of companies expecting fewer orders and 43.4% of businesses forecasting a stable number of orders.

Concerning export orders in QII as compared with QII, 29.3% of the enterprises reported a higher number of export orders; 19.5% of the companies posted a lower number of export orders and 51.2% had a stable number of export orders. As much as 40.7% of the companies expected more export orders in QIII; 12.8% of the companies forecast less export orders and 46.5% of the businesses projected a stable number of export orders.

As to production costs, 30.9% of the enterprises said that production costs per product in QII increased against QI; 9.7% of the companies confirmed lowered costs and 59.4% of the businesses reported stable costs. When projecting QIII’ trends, 23.9% of the businesses expected increased production costs in QIII over QII; 11.3% of the companies said production costs would decrease and 64.8% of the companies forecast stable production costs.

Regarding product prices in QII as compared with the previous quarter, as much as 18.5% of the companies recorded increased product prices; 11.3% of the enterprises had lower prices and 70.2% of the companies kept prices stable. When forecasting QIII’s trends, 20.6% of the companies expected higher product prices; 8.6% of companies forecast lower prices while 70.8% of enterprises had stabilized product prices.

With respect to product inventories in QII of this year as compared with the previous quarter, 21.1% of the companies increased their inventories; 32.7% of the companies recorded reduced inventory levels and 46.2% of the companies reported stable inventories. When projecting QIII’s trends, 16% of the companies forecast higher inventories than QII; 33.4% of the businesses expected reduced inventories and 50.6% of the businesses reported stable inventories.

With regard to material inventories in QII as compared with QI, 19.7% of the companies reported increased material inventories; 30.6% of the businesses had reduced material inventories and 49.7% of them recorded stable material inventories. As much as 15.3% of companies expected higher material inventories; 31.7% of enterprises forecast decreased material inventories while 53% of companies said that their material inventories would not fluctuate.

Service activities

Retail sales of consumer goods and services

Total retail sales of consumer goods and services in June were estimated at VND266.7 trillion, up 1.5% MoM and up 9.2% YoY. In terms of the economic structure, the State sector generated VND30 trillion, up 1.2% MoM; the non-state sector VND227.7 trillion, up 1.5%; the FDI sector VND9 trillion, up 1.3%.

Retail sales of goods in the month reached VND200.3 trillion, up 0.9% MoM and up 12.2% YoY, of which sales of garments increased by 1.3% and 14.7%; household appliances, tools and equipment by 1.2% and 11.3%; means of transport by 0.9% and 10.7%; petroleum by 0.7% and 8.3%; foods & foodstuffs by 0.6% and 26.1%.

Sales of accommodation and catering services in June totaled VND32.9 trillion, up 5.1% MoM and 12.7% YoY. Some localities reported higher sales of accommodation and catering services as compared with the same period last year, including Ho Chi Minh City with an increase of 33%; Hanoi 32%; Ha Tinh 23%; Danang 21%; Khanh Hoa 18%. Some localities recorded decreased sales of accommodation and catering services, including Kien Gian with a decrease of 24.6%; Phu Tho 6%; Quang Tri 4.4%; Dong Nai 2.7%; and Thua Thien - Hue 1.8%.

Revenues from tourism and travel in the month reached VND2.7 trillion, up 8.3% MoY and down 6% YoY. Some localities reported higher revenues from tourism and travel, including Nghe An with a fall of 38.9%; Dong Nai 37%; Long An 36%; Binh Phuoc 35%; Ben Tre 35%.

Sales from other services was estimated at VND30.7 trillion, up 0.6% MoM and up 5.5% YoY. Some localities reported a good increase in their revenues from other services, including: Ho Chi Minh City with an increase of 15%; Quang Ninh 12.8%; Hanoi 7.6%; Nam Dinh 6.2%.

Generally, in the first six months of this year, total retail sales of consumer goods and services were estimated at VND1,572.1 trillion, representing a YoY increase of 9.8%, if the price factor was excluded, it would be 8.3% higher than the same period of some recent years[vii]. Total retail sales of consumer goods and services of the state sector in the first six months reached VND174.3 trillion, accounting for 11.1% of the total and representing an increase of 12.1 %; the non-state economy VND1,345.7 trillion, accounting for 85.6% and up 9.4%; the FDI sector VND52.2 trillion, accounting for 3.3% and up 11.6%. By service, retail sales of goods in the months totaled VND1,193.9 trillion, accounting for 75.9% of the total and up 10.6% YoY; Sales of accommodation and catering services VND182.1 trillion VND, accounting for 11.6% and up 5.9%; Other services 182.4 trillion VND, making up 11.6% and 9.7%; sales from travel and tourism VND13.7trillion, occupying 0.9% and down 6.1%

 

Carriage of passengers and cargos

Passenger carriage in the first six months was estimated at 1610.9 million arrivals, up 7.4% YoY and 71.7 billion passengers-kilometers, up 7% YoY. Of which central transportation reached 16.8 million passengers, up 3% and 17.8 billion passengers-kilometers, up 4.9%; local transportation gained 1,594.1 million passengers, up 7.5% and 53.9 billion passengers-kilometers, up 7.7%. Estimated passenger transportation by road in the first six months achieved 1,519.1 million, up 7.7% and 53.1 billion passengers-kilometers, up 7.9% YoY; transportation by air reached 9.6 million passengers, up 4.6% and 15.1 billion passengers-kilometers, up 4.4%; transportation by railway totaled 5.6 million passengers, down 1.8% and 2.1 billion passengers-kilometers, up 4.6%; transportation by sea ​​was 2.8 million passengers, up 2.8% and 131.3 million kilometers, up 2.6%.

Cargo carriage in the first six months was estimated at 545.8 million tons, up 5.7% and 107.1 billion tons-kilometers, up 1.7% YoY. Of which domestic transportation achieved 530.6 million tons, up 5.8% and 45.6 billion tons-kilometers, up 6.5%; overseas transportation reached 15.2 million tons, up 2.9% and 61.6 billion tons-kilometers, down 1.6%. Cargo transportation by road was estimated at 420.2 million tons, up 6.3% and 22.4 billion tons-kilometers, up of 7%; by river 93.3 million tons, up 4.7% and 18.3 billion tons-kilometers, up 5.6%; by sea 28.6 million tons, up 1.5% and 63.9 billion tons-kilometers, down 1.4%; by railway 3.5 million tons, up 2.1% and 2.2 billion tons-kilometers, up 10.6%.

 

International visitors to Vietnam

The estimated number of international visitors to Vietnam in June was 529 thousand, down 8.2% MoM, of which arrivals by air reached by 8.6% and by road down 8.9% while arrivals by sea were 2.5 times higher. Arrivals from Europe hit the biggest decrease of 14.7% and from Asia was up 10.6% while arrivals from Australia increased by 1.6%. Some Asian countries recorded a decrease in the number of visitors to Vietnam, including China with a fall of 30.2%; South Korea 10.6%; Thailand 5.1%; Japan 5.3%. The number of visitors from European countries fell, including France with a decrease of 50% while the number of arrivals from Germany, the Netherlands and Belgium fell by 25-30%. Only three Scandinavian countries namely Norway, Sweden and Finland and Russia reported an increase in the number of visitors to Vietnam as compared with the previous month. Arrivals from the US rose by 31.1% while those from Canada decreased by 12.1%. The recent Mers outbreak in Korea and Asia is seen as one of the reasons preventing people from traveling during this period.

As compared with the same period last year, international visitors to Vietnam in June fell by 1.9% and the month is the 13th consecutive months when the number of foreign visitors to Vietnam decreased since March 2014. One of the reasons is that the number of foreign tourists to Vietnam was low in the first five months of 2013 and started to increase sharply from June to May 2014. From June 2014, the East Sea incident gradually reduced the number of tourists. The number of tourists in the first months of 2015 was higher than 2013 (an average increase of 7.5%) but lower than 2014 (an average rise of 11.3%).

Generally in the first six months of 2015, the number of international visitors to Vietnam was estimated at 3.8 million, down 11.3% YoY, of which arrivals by air decreased by 9.1%; by road 19.7%; and by sea 26.5%.

With regard to markets, visitors from most Asian countries declined as compared with the same period of the previous year except for Taiwan, Korea and Singapore. For the European market, visitors from Germany, Italy, Spain and Finland increased over the same period last year while the rest of other major markets in Europe recorded fewer visitors to Vietnam due to people’s economic difficulties, especially Russia (down 13%). Arrivals from the US rose by 3.9% while those from Canada fell by 4.3%. Arrivals from Australia decreased by 9% YoY.

In recent years, the number of international visitors to Vietnam was much lower as compared with other countries in the region: In 2014 Malaysia welcomed 27.4 million visitors; Thailand 24.8 million; Singapore 15.1 million; Indonesia 9.4 million while Vietnam only received 7.8 million tourists. This is mainly because the country fails to attract visitors for both travel and business purposes while developed countries now offer tourists with this option. On the other hand, the management of tourism-related activities in the country is not closely and efficiently collaborated among authorities and agencies. According to the 2013 survey, 68.5% of visitors said Vietnam had beautiful landscape. However, when asked about how satisfied they were with services, only 39% of the visitors interviewed thought they were good. According to international tourists to Vietnam, local goods are not really abundant and prices are more expensive than some other markets.

 

Post and Telecommunications

The total number of mobile subscribers in the first six months was estimated at 136.9 million, up 14.3% YoY, of which 2G subscribers reached 107.8 million, up 6% while the number of 3G subscribers was 29.1 million, representing a sharp increase of 29.6% YoY.

The telecommunications industry’s revenue in the first six months of this year was estimated at VND177.8 trillion, up 8.4% YoY, including Internet sales of VND10.5 trillion, up 12, 2% YoY.

MACROECONOMIC STABILIZATION, INFLATION CONTROL

Currency, credit

As of June 19, 2015, the country recorded a credit growth of 6.28% as compared with December 2014. This was much improved as compared with an increase of 2.03% in the same period of 2014. In the first six months of the year, total deposits at commercial banks increased by 4.58%, lower than the 5.26% rise of the same period last year while total means of payment increased by 5.09%, lower than the increase of 6.37% of the same period of 2014. The liquidity of the commercial banking system continued to be improved to ensure the solvency of the system. Foreign currency exchange rates were raised to the maximum amplitude of 2% set for the year.

Construction, investment

Construction

The construction industry in the first six months of this year experienced several positive changes with difficulties being gradually removed and a number of large investment projects being commenced, which provided construction firms with more development opportunities.

The production value of construction at current prices in the six months was estimated to reach VND393.8 trillion, of which the state sector gained VND35.7 trillion, accounting for 9.1%; the non-state sector generated VND328.9 trillion, making up 83.5%; and the FDI sector obtained VND29.2 trillion, accounting for 7.4%. The FDI sector remained a high growth rate due to as construction projects in Vung Ang Economic Zone were accelerated, of which several components of Son Duong iron and steel complex & deep-water port and Ha Tinh Formosa were completed and put into use. Of the total production value, the production value of construction of residential buildings reached VND163.9 trillion; non-residential buildings VND63.3 trillion; civil engineering works VND121.9 trillion; specialized construction activities VND44.7 trillion.

The production value of construction in the first six months at 2010 constant prices was estimated at VND313.3 trillion, up 6.8% YoY, of which the State sector generated VND29.1 trillion, down 0.9%; the non-state sector VND260.9 trillion, up 6.5%; and the FDI sector VND 23.3 trillion, up 22.6%. Of the total production value, the production value of construction of residential buildings totaled VND129.8 trillion; non-residential buildings VND50.5 trillion; civil engineering works VND96.8 trillion; Specialized construction activities VND36.2 trillion.

Domestic investment

In the first six months of the year, thanks to the drastic leadership and administration of the government, more effective measures were taken to speed up the disbursement of investment capital for projects and programs, which promoted the attraction and disbursement of domestic and foreign capital inflows.

The total realized social investment capital at current prices in the first six months was estimated at VND553.8 trillion, up 9.4% YoY and equal to 31.1% of GDP. Of which the state sector disbursed VND214 trillion, accounting for 38.7% of the total and increasing 7.2% over the same period last year; the non-state sector VND202.8 trillion, accounting for 36.6% and up 11.4%; the FDI sector VND137 trillion, accounting for 24.7% and up 9.9%.

Of the State sector’s investment capital, capital from the State budget in the first six months was estimated at VND92.3 trillion, equivalent to 44.8% of the annual plan and up 1.7% from the same period ò 2017, and of which:

- The centrally managed capital reached VND18,128 billion, equivalent to 44.5% of the annual plan and down 1.2% from the same period of 2014, of which the investment capital realized by the Ministry of Transport totaled VND3,092 billion, equal to 45% and down 11.9%; by the Ministry of Agriculture and Rural Development VND1,268 billion, equivalent to 44.3% and down 4.6%; by the Ministry of Construction VND707 billion, equaling 45.6% and down 1.5%; by the Ministry of Health VND707 billion, equal to 44.7% and up 67.9%; by the Ministry of Education and Training VND323 billion, equal to 37.9% and up 12.8%; by the Ministry of Natural Resources and Environment VND292 billion, equivalent to 42.6% and down 1.4%; by the Ministry of Culture, Sports and Tourism VND232 billion, equal to 39.5% and up 7.4%; by the Ministry of Industry and Trade VND163 billion, equal to 37.7% and up 8.8%; by the Ministry of Science and Technology VND140 billion, equal to 47.2% and up 12.5%; by the Ministry of Information and Communications VND94 billion, equaling 51.7% and down 1.8%.

- The locally managed capital amounted to VND74,194 billion, equal to 44.9% of the annual plan and up 2.4% YoY. Of the sum, the realized provincial State budget capital reached VND51,132 billion, equaling 43% of the annual plan and up 4.4%; the district-level State budget capital VND17,873 billion, equivalent to 47.8% and down 1.5%; the commune-level State budget VND4.189 billion, equivalent to 61.8% and down 4.8%. The total realized capital from the State budget of some provinces and centrally-administered cities is as follows: Hanoi reached VND9,827 billion, equal to 48.7% of the annual plan and down 2.5% YoY; Ho Chi Minh City VND7,767 billion, equivalent to 40.3% and up 6.7%; Nghe An VND2,321 billion, equaling 60.9% and up 3.5%; Ba Ria - Vung Tau VND2,105 billion, equal to 39.7% and up 0.4%; Kien Giang VND1,987 billion, equivalent to 59.8% and up 24.7%; Quang Ninh VND1,937 billion, equaling 27.3% and up 13.1%; Vinh Phuc VND1,931 billion, equal to 36.8% and up 2.6%.

From the beginning of the year to June 20, 2015, the country recorded 757 newly licensed FDI projects with the registered capital of US$3,839.2 million, representing a 15.4% increase in the number of projects and 21% in the capital value from the same period of 2014. At the same time, as many as 281 licensed projects were provided with an additional capital of US$1,654.2 million. Accordingly, the total registered capital of both newly and additionally registered projects reached US$5,493.4 million, down 19.8% against the same period last year. The realized FDI capital in the first six months of 2015 was estimated at US$6.3 billion, up 9.6% YoY.

In the first six months, the processing & manufacturing industry attracted foreign investors with the total registered capital of US$4,185.9 million, accounting for 76.2% of the newly and additionally funded capital; the real estate business industry US$465.5 million, accounting for 8.5%; and remaining industries US$842 million, making up 15.3% of the total.

As many as 40 provinces and centrally-run cities recorded newly-licensed FDI projects in the first six months, including Dong Nai with the highest registered capital of US$900.8 million, accounting for 23.5% of the total newly registered capital, followed by Ho Chi Minh City with US$765.8 million, accounting for 19.9%; Tay Ninh with US$282.7 million, making up 7.4%; Haiphong with US$233.2 million, accounting for 6.1%; Vinh Phuc with US$187.4 million, occupying 4.9%; Ha Nam with US$183.5 million, accounting for 4.8%; Tra Vinh with VND120 million, making up 3.1%.

Of 47 countries and territories having newly-licensed FDI projects in Vietnam in the first six months, South Korea was the biggest investor with US$1,086.9 million invested in the country, accounting for 28.3% of the total newly registered capital; followed by Turkey with US$660.3 million, making up 17.2%; the British Virgin Islands with US$441.8 million, accounting for 11.5%; Hong Kong (China) with US$397.5 million, occupying 10.4%; Japan with US$280.3 million, up 7.3%; Singapore with US$161.3 million, accounting for 4.2%; Taiwan with US$157.8 million, making up 4.1%; China with US$125.7 million, representing 3.3%.

 

State budget revenues and expenditures

Total State budget revenues as of June 15, 2015 were estimated at VND406.2 trillion, equaling 44.6% of the yearly estimate, of which domestic revenues totaled VND298.8 trillion, by 46.88%; revenues from crude oil VND32.6 trillion, equal to 35%; revenues from export-import balance VND73.4 trillion, equal to 41.9%. Of domestic revenues, revenues from the state sector reached VND91.2 trillion, equal to 20.6% of the annual estimate; revenues generated by the FDI sector (excluding crude oil) VND61.8 trillion, equivalent to 43.4%; taxes on trading, commercial activities and non-state services VND58 trillion, equaling 48.5%; personal income tax VND27.6 trillion, equal to 53.8%; environmental protection tax VND6.6 trillion, equivalent to 51%; land use fees VND24.4 trillion, equal to 62.7%.

State budget expenditures from the beginning of the year to June 15, 2015 were estimated to reach VND501.2 trillion, equal to 43.7% of the yearly estimate, of which spending on investment and development totaled VND80.8 trillion, equivalent to 41.4% (capital construction investment only amounted to VND78.4 trillion, equal to 41.2%); spending on economic development, social, defense, security and administrative management purposes VND345.3 trillion, equal to 45%; spending on debt and ODA repayment VND71 trillion, equivalent to 47.4%.

Export and import of goods

Exports of goods

Export turnover in May reach US$13.7 billion, US$199 million higher than the estimate, of which the export value of telephones and accessories was US$165 million higher; crude oil US$99 million higher; footwear US$66 million higher; garments and textiles US$59 million higher.

Export turnover in June was estimated at US$14.3 billion, up 4.4% MoM, of which the export value of the FDI sector (including crude oil) amounted to US$10.1 billion, up 4.2% while the domestic sector recorded an export turnover of US$4.2 billion, up 4.8%. Some exports posted a higher export turnover as compared with the previous month: The export value of garments and textiles increased by 17%; rice by 19%; rubber by 19.8%; cassava and cassava products by 17.7%; tea by 32%. As compared with the same period of 2014, export turnover in June rose by 16.6%, of which the FDI sector’s export value (including crude oil) went up 25.5% while the domestic sector’s export turnover fell by 0.7%.

Generally in the first six months of this year, export turnover was estimated at US$77.7 billion dollars, up 9.3% YoY and lower than the 15.4% increase of the first six months of 2014. If the price factor was excluded, export turnover in the period was estimated US$80.7 billion, up 13.4% YoY. The average unit price reduction is shown in some commodities such as crude oil, the price of which fell by 47.6%; rubber by 22.4%; rice by 4.7%; cassava and cassava products by 5.3% ... Of the country’s total export turnover in the first six months, the domestic sector’s export value was US$22.8 billion, down 2.9% while the FDI sector reported a export value (including crude oil) of US$54.9 billion, up 15.3% but lower than the 16.1% increase recorded in the same period of 2014 and accounting for 70.6% of the total export value, the highest level ever. If crude oil was excluded, the FDI sector’s export value accounted for 67.8% of the country’s total export value and increased by 20.8%, higher than the 16.8% rise of the same period last year. This suggests that the decline was mainly due to crude oil while the export value of other staples rose sharply.

The strong increase in the export turnover in the first six months was mainly contributed by the FDI sector with the export value of certain commodities made up a large proportion in the country’s total export turnover of the respective goods such as Telephones and accessories (99.6%); garments and textiles (60.6%); Footwear (79.9%); machinery, equipment and spare parts (89.6%). In the first six months of this year, an increase in the FDI sector’s export value added 10.3 percentage points to the overall growth while the domestic sector’s export turnover reduced the overall rise by 1 percentage point.

Among the major export items, some items had higher export turnover as compared with the same period last year: The export value of telephones and accessories reached US$14.7 billion, up 27.1%; textiles and garments US$10.1 billion, up 9%; electronic products, computers and components US$7.4 billion, up 60.4%; footwear US$5.9 billion, up 21.9%; machinery, equipment and spare parts US$3.8 billion, up 10.4%; wood and wood products US$3.2 billion, up 8.8%; cashew nuts US$1.1 billion, up 28.4%; bags, suitcases, hats & umbrellas US$1.5 billion, up 17.5%. Some export staples, particularly agricultural and aquatic products, reported lower export turnover as compared with the same period last year: The export value of crude oil totaled US$2.2 billion, down 45.7%; aquatic products US$3 billion, down 14.5%; coffee US$1.4 billion, down 34.8%, (down 35.5% in quantity); rice US$1.3 billion, down 8.9%, (down 4.4% in quantity); vehicles and spare parts US$2.7 billion, down 11.3%; steel US$856 million, down 14.1%.

Regarding export markets in the first six months of this year, the United States continued to take the lead with US$15.7 billion, up 18.6% YoY; followed by the EU with US$14.8 billion, up 11.6%; ASEAN with US$9.3 billion, down 0.8%; China with US$7.7 billion, up 3.6%; Japan with US$6.7 billion, down 6.7%; South Korea with US$3.7 billion, up 22.3%.

Regarding the structure of exports in the first six months, export value of heavy industry products and minerals was estimated at US$35.5 billion, up 14.5% over the same period of 2014 and accounting for 45.7% of total export turnover (2.1 percentage points higher as compared with the same period of 2014). Export value of light industry goods and handicrafts reached at US$31.5 billion, up 10.1% (the proportion increased from 40.2% in the first six months of 2014 to 40.5% in first six months of this year). Export turnover of agricultural and forestry products amounted to US$7.7 billion, down 3.8% (the proportion fell from 11.2% to 9.9%). Export value of aquatic products totaled US$3 billion, down 14.5% (the proportion dropped from 5% to 3.9%).

Imports of goods

Import turnover in May reached US$14.9 billion, US$538 million higher than the estimate, of which import value of fabrics was US$109 million higher than the estimate; machinery, equipment and spare parts US$80 million higher; steel US$76 million higher; plastics US$33 million higher.

Import value in June this year was estimated at US$15 billion, up 0.4% from the previous month, of which the domestic sector’s import turnover reached US$8.8 billion, up 0.2%; while the FDI sector’s export value totaled US$6.2 billion, up 0.7%. Import turnover in the month of some commodities used for production increased against the previous month: Import turnover of machinery, equipment, tools and spare parts increased by 4.9% (US$120 million); plastics up 2.8% in volume (9 thousand tons) and up 6% in value (US$32 million); textiles up 10% in volume (7 thousand tons) and 11.2% in value (US$15 million).

Generally, in the first six months, import turnover was estimated to reach US$81.5 billion, up 17.7% YoY, much higher than the 10.5% rise recorded in the same period of 2014. Of the sum, the domestic sector’s import value totaled US$32.7 billion, up 7.7%, lower than the 10.6% increase of the same period last year while the FDI sector’s import turnover amounted to US$48.8 billion, up 25.5%, higher than the growth of 10.4% in the same period 2014. If the price factor was excluded, the value of imported goods in the first six months was estimated at US$84.6 billion dollars, up 22.1% YoY.

In the first six months of this year, import value of some items increased over the same period last yea. Import value of machinery, equipment and spare parts was estimated at US$14.1 billion, up 37.4%; Fabrics US$5.2 billion, up 13%; electronic products, computers and components US$11.4 billion, up 37.5%; telephones and accessories US$5.2 billion, up 31.9%; steel US$3.7 billion, up 10%; textile & footwear materials US$2.6 billion, 13.1%; plastic products US$1.8 billion, up 22.4%; Other base metals US$1.8 billion, up 12.2%; cars US$2.9 billion, up 97.5%, including CBU import turnover of US$1.6 billion, up 186%. Some items posted lower import value over the same period: import value of petroleum totaled US$2.9 billion, down 32%; plastics reached US$2.9 billion, down 4%; wood and wood products US$1.1 billion, down 9.8%.

Concerning import markets in the first six months of the year, China continued to be the largest import market with an import turnover of US$24.4 billion, up 23.9% YoY; South Korea US$13.8 billion, up 31.2%; ASEAN US$12 billion, up 6%; Japan US$7.3 billion, up 27.7%; EU US$4.5 billion, up 5.8%; the US US$3.8 billion, up 19.8%.

Regarding the structure of imports in the first six months, import value of machinery, equipment and spare parts accounted for 41.1%, 3.9 percentage points lower from the same period of 2014; fuels and materials 49.9%, 4.3 percentage points higher; consumer goods 9%, 0.4 percentage points lower.

Trade deficit in May was US$1.2 billion, US$300 million higher than the estimate. In the first half of 2014, the country recorded a trade surplus of US$1.9 billion while reported trade deficit in the first six months of this year of $3.7 billion, equal to 4.8% of total export turnover. The trade deficit of the domestic sector amounted to US$9.8 billion, up 44% (US$3 billion) as compared with US$6.8 billion trade deficit in the same period of 2014 as export value fell by 2.9% this year while import turnover rose by 7.7%. The FDI sector continued to recorded a trade surplus of US$6.1 billion, down nearly 30% (equivalent to US$2.6 billion) as compared with the US$8.7 billion trade surplus in the first six months of 2014 as export value grew at a lower rate than import turnover.

 

Price Index

Consumer price index (CPI)

CPI in June 2015 rose by 0.35% MoM and this month recorded the highest CPI growth in the first six months of this year[viii]. The CPI increase in June as mainly due to: (1) The impact of the increase in the petroleum price on May 20, 2015 and the diesel price on May 21 and June 4, 2015; (2) Prolonged hot weather, causing power demand to surge and the electricity price index to rise by 1.52% in June; (3) The price of medical services in Ho Chi Minh City was adjusted up from June 1, 2015 according to the roadmap specified in the Joint Circular No. 04/2012/TTLT-BYT-BTC; (4) The price index of tourism services tended to increase in June as the summer holiday season started in the month.

Among goods and services, transportation reported the highest CPI growth at 3.54%; medicine and medical services at 0.38% (prices of medical services rose by 0.43%). Other goods and services recorded a CPI growth rate lower than the overall growth rate or a decreased CPI growth rate, including: Housing and construction materials up 0.3%; cultural, entertainment and tourism up 0.26%; drinks and tobacco up 0.24%; garments, textiles, headwear, footwear up 0.17%; household equipment and appliances up 0.12%; education price index remained stable; both post & telecommunications and catering services down 0.03% (food down 0.62%; foodstuff up 0.1%; dining-out services by 0.11%).

CPI in June 2015 added 0.55% as compared with December 2014 and went up 1% over the same period last year. On average CPI in each month during the first six months of this year ticked up only 0.1%, the lowest growth rate in recent years. Average CPI in the first six months of this year increased by 0.86% YoY.

Gold price and US dollar price indexes

Gold price indexes in June 2015 fell by 0.08% MoM, increased by 0.17% compared with December 2014 and dropped by 4.77% YoY. US dollar price indexes in the month rose by 0.62% MoM; increased by 1.92% from December 2014 and went up 2.65% YoY.

Producer Price Index

Product price index (PPI) for agricultural, forestry and fishery products in QII of this year decreased by 0.56% QoQ and rose by 0.23% YoY, of which PPI for agricultural products as down 0.5% and up 1.48%; forestry products up 1.19% and 3.4%; seafood down 0.99% and 4.2%. PPI for industrial products in QII was up 0.36% QoQ and down 0.36% YoY, of which PPI for mining products down 1.16% and down 11.61%; processing & manufacturing products down 0.22% and up 0.33%; electricity generation and supply up 4.64% and 6.36%; clean water supply & waste water treatment up 0.65% and 3.01%.

Price index of fuels and materials used for manufacturing QII of this year rose by 0.15% QoQ and 2.25% YoY, of which price index of fuels and materials used for some industries was as follows: Mining up 2.49% and 3.88%; agriculture, forestry and fishery up 0.12% and 3.74%; processed wood, paper and printing paper up 0.16% and 1.37%; medicines, drugs and pharmaceuticals up 0.43% and 1.15% increase; processing, repair and installation of machinery and equipment up 0.41% and 3.62%.

Transportation and warehouse price indexes in QII reduced by 0.54% QoQ and by 3.32% YoY, of which price index of passenger transportation dropped by 0.53% and 3.87%; price index of cargo transportation decreased by 0.54% and 4.1% while price index of warehouse and logistics services fell by 0.54% QoQ and increased 1.32% YoY. Transportation price indexes of transportation groups in QII were as follows: by rail down 4.65% QoQ and down 13.15% YoY; by road and bus down by 0.5% and 6%; by waterway down 0.57% and 1.81%.

Service price indexes in QII of 2015 went up 0.6% QoQ and 2.79% YoY, of which service price indexes of some industries were as follow: Accommodation & catering up 1.17% and 3.06%; information and communications up 0.14% and 0.41% increase; education and training up 0.08% and 6.07%; health care and social assistance up 0.35% and 1.93%.

Export and import price indexes

Export price indexes of goods in QII slumped by 1.09% QoQ and 3.61% YoY, of which export price indexes of some items increased/decreased QoQ and YoY as follows: Vegetables up 1.03% and down 1.64%; chemical products up 1.64% and 7.89%; pepper down 1.36% and up 41.19%; paper and paper products up 1.21% and 5.22%.

Import price indexes of commodities in QII were down 2.09% QoQ and 4.66% YoY, of which import price index of aquatic products decreased by 1.76% and 5.3%; fruits and vegetables by 0.31% and 2.24%; chemicals by 3.36% and 6.99%.

ToT[ix] in QII increased by 1.02% QoQ and by 1.1% YoY, while ToT of aquatic products went up 0.73% and 3.75%; chemicals by 5.17% and 16%; wood and wood products by 2.63% and 4.27%; iron and steel by 8.44% and 12.03%; fruits and vegetables by 0.61% and 1.34%.

 

 

SOCIAL ISSUES

Labor and employment

The number of laborers aged 15 years old or more across the country as of July 1, 2015 was estimated at 53.86 million (147 thousand higher than the same period of 2014), including 27.75 million male workers, accounting for 51.52% and 26.11 million female employees, making up 48.47%. Regionally, the number of laborers aged 15 years of age or more in urban areas was 16.81 million, accounting for 31.2% and rural areas was 37.05 million, occupying 68.8%.

The number of employees in the working age as of the above time was estimated to reach 47.79 million and did not change much as compared to the same period last year, including 25.64 million male workers, accounting for 53.65% and 21.9 million female employees, making up 46.35%. The labor force in the working age in urban areas totaled 15.45 million people, accounting for 32.34% and in rural areas reached 32.34 million people, making up 67.66%.

The number of employed people aged 15 years old or more in QII of this year was estimated at 52.55 million people, including 23.7 million people are working in the agriculture, forestry and fishery industry, accounting for 45.1% of the total number; 11.46 million in the industry and construction sector, making up 21.8%; 17.39 million people in the service sector, accounting for 33.1%.

The unemployment rate of people in the working age in the first six months of 2015 was estimated at 2.44%, where the unemployment rate in urban areas was 3.35% and in rural areas was 2.00%. The unemployment rate of people in the working age in QII this year was estimated at 2.45%, where the unemployment rate in urban areas was 3.27% and in rural areas was 2.06%.

The unemployment rate of young people (15-24 years old) in the first six months was estimated at 6.71%, where the unemployment rate of youngsters in urban areas was 11.04% and in rural areas was 5.15%. The unemployment rate of young people (15-24 years old) in QII of 2015 was estimated at 6.82%, where the unemployment rate of youngsters in urban areas was 11.12% and in rural areas was 5.3%.

The unemployment rate of people aged 25 years old or higher in the first six months was 1.38%, where the unemployment rate of people aged 25 or higher in urban areas was 1.89% and in rural areas was 1.13%. The unemployment rate of people aged 25 years old or higher in QII was 1.34%, where the unemployment rate of people aged 25 years old or higher in urban areas was 1.8% and in rural areas was 1.12%.

Estimated underemployment rate of laborers within the working age in the first six months of this year was 2.52%, of which it was 1.29% for urban areas and 3.11% for rural areas. Estimated underemployment rate of laborers within the working age in QII of this year was 2.62%, of which it was 1.43% for urban areas and 3.18% for rural areas.

The proportion of unemployed workers in the first six months of age in 2015 is estimated at 2.52%, while in urban areas was 1.29%; rural areas was 3.11%. The proportion of unemployed workers aged QII/2015 is estimated at 2.62%, while in urban areas was 1.43%; Rural area is 3.18%.

2. People’s life and social security

In June, the country had 17.2 thousand households suffering from food shortage, down 25.2% from the same period of 2014, corresponding to 75.8 thousand hungry people, down 21.9%. Generally, in the first six months of the year, the country had 756.2 thousand households suffering from food shortage, down 32.3% YoY, corresponding to 756.2 thousand hunger persons, down 34.4%. To overcome the problem, from the beginning of the year, all administrative levels, sectors and localities provided difficult families with 16.4 thousand tons of food and VND8.5 billion, only in June, 1.2 thousand tons of food. Poverty rate in 2014 calculated according to the Government's poverty line during the 2015-2020 period[x] was 8.4%, 1.4 percentage points lower as compared with 2013, of which poverty rate in urban areas was 3%, 0.7 percentage points lower and in rural areas was 10.8%, 1.9 percentage points lower.

According to preliminary reports, total expenses for social security and poverty reduction activities in the first six months of the year were VND3,268 billion, of which VND2,179 billion for visiting and supporting policy beneficiaries; VND765 billion for supporting poor households and VND324 billion for famine relief and other social relief. Besides, more than 5.9 million health insurance cards were issued free for policy beneficiaries across the country.

3. Education and training

As of the beginning of the 2014 -2015 school year, there were 14,179 kindergartens, 338 schools more than the previous school year; 15,277 primary schools, 60 schools more; 10,293 secondary schools, 3 schools more; 2,386 upper secondary schools, 18 schools fewer; 585 basic general schools, 7 schools fewer, and 381 high schools, 27 schools more. In this school year, the country had 3.8 million preschool pupils, up 3.9% from the previous school year; 15.1 million primary and high school students, of which there were 7.6 million primary pupils, up 1.5%; 5.1 million secondary pupils, up 3.4% and 2.4 million high school pupils, down 3.7%. By June 2015, 32 out of 63 provinces and cities were qualified for preschool education universalization for children aged 5.

In 2014, there were 436 universities and colleges nationwide, an increase of 9 universities/colleges as compared to the previous year, including 347 public universities/colleges and 89 private universities/colleges. The number of university and college teachers was 91.2 thousand, up 0.5%, where public university/college teachers totaled 73.9 thousand, down 1.8% and accounting for 81% of the total number. The number of university/college students in 2014 was 2.4 million, up 14.7% over the previous year, reaching 2615 students per one thousand people; The number of university/college graduates reached 441.8 thousand, up 8.7%. By 2014, there were 102.7 thousand postgraduates and 5.4 thousand medical trainees. The number of people completing postgraduate education was 32.500 and 2,500 people finished medical training.

The number of specialized secondary schools in 2014 was 312, an increase of 17 schools as compared with the previous year, including 186 public specialized secondary schools and 126 private specialized secondary schools. The number of teachers at specialized secondary schools totaled 11 thousand teachers, down 4.3% while the number of specialized secondary school students was 349.7 thousand, down 17.1%.

Cultural and sport activities

In the first six months of the year, many cultural events are organized on a large scale in localities such as cultural activities towards the homeland’s sea and islands; the 27th National Photo Exhibition held in Hai Phong; the 21st Amateur Music Festival in Long An; Telefilm - Vietnam International Exhibition on Film & Television Technology 2015, etc.

Public sport events took place lively: Olympic Day run “For the health of the entire population”; National Sports Festival for Ethnic Minority Groups 2015, in Kon Tum; the third National Traditional Wrestling Championship in Hanoi; Let's Viet Championship, a traditional martial arts and boxing tournament for outstanding national fighters in Ho Chi Minh City, etc.

Concerning high achievements sports, Vietnam’s sport delegations won 155 gold medals, 121 silver medals and 121 bronze medals. Vietnam ranked third at the 28th Southeast Asian Games with 73 gold medals, 53 silver medals and 60 bronze medals and broken 13 SEA Games records.

Epidemic diseases and food poisoning

In June, the country recorded 3.6 thousand cases of hand, foot and mouth disease; nearly 2.2 thousand cases of dengue; 67 cases of viral encephalitis (3 deaths); 32 cases of typhoid; 10 cases of meningococcal meningitis.

In the first six months of this year, there were 19.7 thousand cases of hand, foot and mouth disease; 13 thousand cases of dengue; 315 cases of viral encephalitis (13 deaths); 154 cases of typhoid; 46 cases of meningococcal meningitis (3 deaths). no case of cholera and influenza A (H5N1) was reported.

In the month, 783 HIV-infected cases were found and the total number of living HIV-infected people across the country as of June 17, 2015 was 225,600, of which 77,500 cases turned to AIDS. The number of persons died of AIDS nationwide as of the above time was 79,200.

In the month, the country recorded 17 cases of food poisoning, infecting 308 people (3 deaths). Generally, in the first six months of the year, the country had 59 cases of food poisoning, infecting 2,206 people (13 deaths)

Traffic accidents

In June 2015 (from May 16 to June 15), the country recorded 1,861 traffic accidents, including 868 less or more serious traffic accidents and 993 collisions, killing 743 people; injuring 468 and hurting 1,127 others. As compared with the same period last year, the number of traffic accidents fell by 9.4% (the number of less or more serious traffic accidents dropped by 1.3%, the number of collisions decreased by 15.6%); the number of deaths was down 2.4%; the number of injured people rose by 84.3% and the number of slightly injured people dropped by 22.4%.

Generally, in the first six months of this year, the country recorded 11,179 traffic accidents, including 5,161 less or more serious traffic accidents and 6,018 collisions, killing 4,478 people; injuring 2,983 and hurting 7,166 others. As compared with the same period last year, the number of traffic accidents slumped by 12,8% (the number of less or more serious traffic accidents decreased by 3.5%, the number of collisions plunged by 19.5%); the number of deaths decreased by 4.5%; the number of injured people fell by 5.2% and the number of slightly injured people decreased by 21.4%. On average, the country had 62 traffic accidents per day in the first six months, including 29 less or more serious accidents and 33 collisions, killing 25 people, injuring 17 and hurting 40 others.

Damage caused by natural disasters

Natural disasters in the first six months affected production activities and people's life in several localities nationwide. According to preliminary reports, natural calamities made left 46 people dead and missing; 55 people injured; more than 270 houses collapsed and washed away; 11.1 thousand houses flooded, blown off or unroofed; 18 thousand hectares of rice and vegetables flooded and damaged. Localities most affected by natural disasters included Quang Ngai with 7 people dead or missing and ten people wounded; More than 800 houses flooded, blown off or unroofed; 4.8 thousand hectares of rice and vegetables damaged; Nghe An with 2 people dead or missing and seven people injured; more than 1.7 thousand houses flooded, blown off or unroofed and 4.1 thousand ha of rice and vegetables damaged. The total value of damage caused by natural disasters in the first six months of the year was estimated at VND474.3 billion, including VND165.2 billion and VND85.4 billion reported by Quang Ngai and Nghe An, respectively. According to preliminary reports, the relief aid to localities hit by natural calamities from the beginning of this year amounted to VND 6.7 billion.

Environmental protection and fire & explosion prevention

In June, authorities detected 902 cases of violating regulations on environmental protection of which 396 cases were handled with a total fine of more than VND12.2 billion. Generally, in the first six months of the year, authorities found 5,200 cases of violating regulations on environmental protection, of which 2,100 cases were handled with a total fine of over VND76.4 billion.

In June, the country recorded 317 cases of fire and explosion, killing 12 people and injuring 20 others with the total value of damage of VND38.2 billion. In the first six months of the year, the country had 1,713 cases of fire and explosion, killing 60 persons and injuring 129 others with the total value of damage of VND319.3 billion.

Generally, the country’s socio-economic situation in the first six months in 2015 continued to be stabilized and achieved certain positive results: Domestic production was much improved; growth showed positive trend; macroeconomic balances remained stable. However, the country's economy would continue to face many difficulties and challenges when getting involved deeply in the integration process due to low competitiveness, weak product branding and low corporate reputation. Besides, complex movements in the supply and demand on the world market placed competition pressure on local exports. Consumption of domestic agricultural products showed many shortcomings and therefore had a significant impact on farmers’ production activities and life. To overcome difficulties and challenges and fulfill the socio-economic development objectives set for 2015, in the following months, agencies, sectors and localities are required to complete the following tasks:

Firstly, continuing improving the investment and business environment through a variety of tax incentives and interest credits for enterprises, especially industrial product manufacturers in order to create conditions to expand their production and increase sales & profits, etc. Strengthening market management, combating smuggling and counterfeit goods to protect domestic producers. Promoting administrative reform, continuing to simplify customs and tariff procedures. Encouraging companies to upgrade their technology & equipment and improve competitiveness. Building and developing businesses towards professional business and production activities and preparedness for integration into the world economy to create quality products and strong brands.

Secondly, promoting exports and reducing trade deficit through the preparation of products meeting quality, design and food safety requirements for export to the markets with which Vietnam has signed free trade agreements (Korea...). Strengthening the availability of market information, market research and development to meet demand for domestic products. Exporters need to actively enhance their competitiveness and product quality, build their product brands, save costs and renovate training activities to improve the quality of human resources and meet ever-increasing requirements of the international economic integration. To soon complete tax policies and laws relating to export and import.

Thirdly, working out effective solutions to overcome the drought crisis and facilitate the full cultivation of summer-autumn rice crop areas in the Central Region and provide additional irrigation water for crops, especially coffee trees in the Central Highlands. Continuing the agricultural restructuring towards higher value-added & sustainable development. Promoting agricultural production by forming a value chain, from manufacturing, purchasing, processing, preservation to consumption in order to create agricultural product brands. Speeding intensive farming, forming large cultivation areas to replace fragmentary and dispersed production models. Reasonably using and allocating labor resources in the agricultural sector in combination with the improvement of educational and technical levels of farmers. Actively studying and applying science and technology in the production and processing of agricultural products. Focusing on developing products that have comparative advantage and high competitiveness and consumer markets.

Fourthly, continuing to focus on addressing public debt, settle and control NPLs on the basis of a specific, transparent and clear strategy. Accelerating the divestment from state enterprises. Implementing in a comprehensive manner monetary policies and manage exchange rates actively, flexibly and reasonably, etc to help solve NPLs, control credit quality and restructure credits towards prioritizing loans for agriculture and rural development, export, supporting industries, small and medium-sized enterprises and high-tech companies. Strictly and effectively managing the foreign currency market to stabilize exchange rates.

Fifthly, continuing to build and standardize the legal system related to social welfares. Stepping up the implementation of socio-economic development programs in combination with job creation, income generation through preferential credit policies, infrastructure investment, development of rural industries, craft villages and farms. Mobilizing resources for the implementation of poverty reduction & job creation, clean water and sanitation; literacy elimination and education universalization programs while enhancing the monitoring, supervision and evaluation of the effectiveness of these programs to ensure sustainable poverty reduction.

 

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