Businesses need more support, report says

Wednesday, Dec 04, 2013 16:48

A worker controls machines at a local mechanical factory. Production has improved but difficulties still remain in the economy. — Photo

HA NOI (Biz Hub) ― National management policies needed to further support businesses and the market, as production improved, but economic difficulties remain, the National Finance Supervisory Council (NFSC) said in their 11-month economic report.

The public's purchasing power improved slowly, with retail consumer goods and services increasing 5.54 per cent in the first 11 months of the year, down 0.86 per cent over the same period last year. Meanwhile, commodity transport rose 4.7 per cent, which was half of last year's figure.

Also, the index of industrial production (IIP) for 2013 was expected to maintain last year's level at 5.8 per cent, but the number of enterprises ceasing production grew 8.4 per cent and newly-registered business capital declined 15.4 per cent this year.

Additionally, exports by domestic companies grew 3.6 per cent, far lower than by foreign direct investment (FDI) firms, with 23.5 per cent.

The State Bank of Viet Nam's Deputy Governor, Nguyen Dong Tien, told a Government press meeting on Monday that total bank loans expanded 7.54 per cent this year through November 25 – which was about 60 per cent of the annual target. He said the figure showed great efforts by lenders, though businesses were still struggling as market demand remained low.

State budget revenues reached VND701.76 trillion (US$33.4 billion) in the first 11 months of the year, representing 86 per cent of the annual quota – but failing to meet the 92 per cent level allocated for the period.

The NFSC said policies to maintain "reasonable growth" were needed, as inflation was under control. "In the medium term, restructuring the economy and renewing growth models are important factors for national economic development," it said in the report.

The country would have to rebalance the State budget, as budget overspending for 2013 has been adjusted from 4.8 per cent to 5.3 per cent of gross domestic product. It was also to continue to ease access to loans for small- and medium-sized enterprises.

The council also suggested exchange rate policies should be more flexible next year to help boost the competitiveness of exports. ― VNS

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