Supermarkets and traditional markets were all full of people on pre-Tet days with long queues of people at counters, waiting for their turn to make payments. Most of the goods in the trolleys were food and essential goods. But stalls for household use appliances and electronic products were deserted.

Local newspapers reported that at flower and ornamental tree markets, there were more sellers than buyers. On the eve of new Lunar New Year, many sellers had to throw away unsold apricot, peach trees and flowers.

Meanwhile, traffic congestion was seen on many streets, while airports were overloaded.

Consumer purchasing power in the Tet month (January) was mixed, with people only spending money on essential goods (food for Tet) and services (flights to home towns to celebrate Tet), while they cut spending on non-essential products.

Economists have warned of difficulties in Q1 and Q2 this year. Economic performance became more unpredictable in Q3 2022, with exchange rate and interest rate fluctuations and sluggish stock, corporate bond and real estate markets. 

Many enterprises laid off workers because of the lack of orders.

The situation can be clearly in the General Statistics Office (GSO) reports. Total retail turnover from goods and services in January 2023 increased by 15.8 percent compared with the same period in 2022, excluding the price factor (the figure was minus 2.5 percent in the same period in 2022).

GSO estimates that the total goods and service retail turnover in January was just 88 percent of the scale of the indicator in normal conditions with no Covid-19 pandemic.

Agencies in late 2022 reported that nearly half million workers in the official and unofficial sectors lost jobs or faced job postponement beginning in late Q3 in 2022.

Difficulties 

The inflation rate was low in 2022, but this was not good news because it showed  weak purchasing power and investment.

However, inflation rose rapidly. The consumer price index (CPI) in Jan 2023 increased by 4.89 percent over Jan 2022, while the core inflation rate grew by 5.21 percent.

Meanwhile, The Index of Industrial Production (IIP) in January fell by 14.6 percent compared with December and 8 percent compared with the same period last year. Rapid and sharp decreases of 9.1 percent and 4.9 percent were reported for the manufacturing and mining industries, respectively.

Export turnover in Jan dropped by 13.6 percent from the previous month and 21.3 percent from Jan 2022.

As such, industrial production and export, the factors affecting momentum for growth, decreased significantly, while inflation was on the rise.

Many problems still exist in domestic production capacity. The financial, monetary and real estate markets have not developed. The national economy has a modest scale, but openness is wide. And the resilience to shocks from outside remains weak. 

Momentum for public sector

The public sector is the major force that can boost or pull back the economy.

It is necessary to create a sandbox mechanism that encourages and protects those who are dynamic, creative and ‘dare to think, dare to do, and dare to take responsibility’, for common benefits. 

The mechanism would help avoid employing officers who work at a moderate level, ‘play it safe’ and dare not be innovative.

A report found that legal problems now account for 70 percent of difficulties faced by real estate firms. How can difficulties be removed if there is no mechanism to protect cadres?

Tu Giang