The National Assembly’s Standing Committee on May 9 convened a meeting to discuss the results of the socio-economic development tasks in 2022 and the tasks in the first months of 2023.

Minister of Planning and Investment Nguyen Chi Dung said policies and solutions to remove difficulties issued earlier this year began showing their influence in April. This was also the time when Vietnam entered a new period of stepping up development of services, especially tourism.

Positive improvements have been seen in some fields, such as the corporate bond market, real estate, public investment and cash flow clearance.

International institutions, including the International Monetary Fund, World Bank and the Organization for Economic Co-operation and Development, continue to give positive prospects about Vietnam’s economic growth in 2023.

Fuel market

Chair of the National Assembly’s Economics Committee Vu Hong Thanh agreed with the government’s report that despite difficulties, Vietnam still gained encouraging results in 2022 with GDP growing by 8.02 percent, a 10-year high. 

However, some problems still exist, including the petroleum market, electricity pricing, and the real estate market.

The government reported that the fuel market has become stable. Nghi Son Refinery is operating at 107 percent of capacity, offsetting the fuel shortage during the previous incident.

However, fuel shortages existed in some localities as many filling stations stopped retail sales, though domestic supply was sufficient and gasoline prices were controlled.

Experts believe the problem lies in the unreasonable method of calculating retail prices which does not ensure profits for retailers. In addition, there are problems in the use of the petrol price stabilization fund.

The National Assembly’s Economics Committee cited the government’s inspectors as commenting that "there are many problems with the fund" and "it is nearly uncontrollable".

Regarding electricity prices, the economics committee pointed out that the 3 percent electricity price increase since May 4 to VND1,920.37 per kwh led to an increase in input costs of enterprises amid decreases in orders and exports.

The committee pointed out the unreasonable price structure designed by the Ministry of Industry and Trade (MOIT): the electricity price paid by people for daily use is even higher than the electricity price for production paid by enterprises.

It stressed that the current electricity pricing scheme does not encourage enterprises to invest in energy-saving equipment and this is why people show their dissatisfaction every time the electricity price increases.

The National Assembly’s Economics Committee has asked the government to clarify the reasons behind the EVN’s loss of VND26.2 trillion incurred by EVN.

Developing renewable energy is an important policy which has been institutionalized in government policies. However, the development of electricity sources is still facing difficulties as wind and solar power remain unsold and the electricity pricing scheme remains unclear. 

Meanwhile, the eighth national power development plan has not been released yet.

The government has been urged to speed up the execution of electricity generation and transmission projects, and control coal and gas supply for electricity production to satisfy high electricity demand in summer.

Real estate market 

Thanh also emphasized the problems in the bond and financial markets that make it difficult for real estate firms to access capital.

It is nearly impossible to mobilize capital through corporate bond issuance, affecting the real estate market, thus having direct impact on many business fields.

The committee cited a report from the HCM City Real Estate Association as saying that legal problems are the biggest obstacle of the real estate market. Besides, complicated administrative procedures cost real estate developers a lot of time to comply with the law (3-5 years on average).

Some experts worried that the real estate firms’ issuance of bonds may lead to a ‘bubble’ in the real estate market. 

In general, real estate firms are facing difficulties in liquidity and cash flow, especially when bonds are getting matured in 2023. The government has been requested by the National Assembly to give additional report on the debts related to real estate.

Thu Hang