Strong disbursement of public investment, especially from the second quarter of this year, has helped increase demands and promote growth of economic sectors, thus contributing to boosting economic growth in the second quarter and the first half of 2023, said General Director of the General Statistics Office Nguyen Thi Huong.

In an interview granted to Vietnam News Agency (VNA) on the role of public investment in the national economic growth, Huong noted that in the second quarter of this year, Vietnam posted an economic growth rate of 4.14%, higher than the 3.28% recorded in the first quarter of this year, showing the efficiency of policies and measures given by the Government and Prime Minister.

In the second quarter, over 140.4 trillion VND (5.93 billion USD) of public investment was disbursed, completing 19.93% of the plan for the whole year, up 52.8% over the first quarter and 21.8% year on year.

The total disbursement in the first half of this year was estimated at over 232.2 trillion VND, fulfilling 33% of the yearly plan, and up 20.5% year on year, which is a positive result, she said, attributing it to the efforts and determination of the Government, the PM and ministries, sectors and localities in speeding up the pubic-invested projects right from the beginning of the year.

She underlined that many projects in the socio-economic recovery and development programme have had their investment procedure completed to enable their implementation, the same as for many others in the middle-term public investment plan in the 2021-2025 period, which will make the disbursement of public investment capital in this year faster than previous years.
Along with the efforts of ministries, sectors and localities in the work, investors and project management boards have also shown strong performance in implementing the projects, she said.

Particularly, the PM has direct drastic measures to remove difficulties and obstacles hindering public investment disbursement to speed up the work, with the issuance of various decisions and directives, including a decision to form five working groups specialising in the work in ministries, sectors and localities, and a directive specifying major solutions to speed up public investment capital and that for three national target programmes in 2023 and the socio-economic recovery and development programme, Huong noted.

Regarding measures to strengthen public investment disbursement for the rest of the year, the GSO leader said that there is a long way to go to complete the target of disbursing 95-100% of the total public investment capital for this year.

She held that it is necessary to focus on completing the legal system for the implementation of public-invested projects from project preparation to operation.

Ministries, sectors and localities should drastically realise directions given by the Government and the PM on the allocation and disbursement of public investment capital and capital for the three national target programmes and the socio-economic recovery and development programme, she said.

Huong stressed the need for leaders of ministries, sectors and localities to directly follow particular project groups to give timely measures to settle difficulties.

Together with preparing land for the project, it is necessary to ensure quality of the projects and efficiency of the capital by reviewing and assessing the disbursement of each project to make adjustments, she said.

Huong also underlined the necessity to strengthen administrative discipline, decentralisation and delegation of power, improving leading officials’ sense of responsibility, and strictly handling violations, while enhancing coordination among ministries, sectors, central agencies and localities in the work.

The People’s Committees of centrally-run cities and provinces should roll out measures to control prices and quality of construction materials for projects using public investment capital, laying the foundation for the adjustment of bidding packages and total investment of projects, Huong added.

VN spends over $480 million on meat imports in first 5 months

VN imported more than 239,000 tonnes of meat and meat products worth US$480 million in the first five months of this year.

The number climbed by roughly 1.6 per cent in terms of quantity but declined by 9.1 per cent in terms of value, according to the General Department of Customs of Việt Nam.

In May, Việt Nam imported 57.62 thousand tonnes of meat, worth $108.8 million, up 9.5 per cent in volume but down 10.2 per cent in value year-on-year. This marked its fourth monthly growth in import volume of meat and meat products.

During the period, the country imported from more than 36 markets, with the five largest suppliers being the US, India, Russia, Brazil, and Poland.

In particular, meat imports from Russia have steadily soared after decreasing in 2022.

The main types of imported meat and include poultry and offal, fresh chilled or frozen pork, and fresh chilled or frozen beef.

Imports of chilled or frozen poultry, offal of pigs, buffaloes, and cows were on the uptrend, while pork and beef imports decreased year-on-year.

In the first five months of 2023, Việt Nam imported 29,610 tonnes of fresh chilled or frozen pork, worth $73.62 million, down 19.9 per cent in volume and 5.7 per cent in value. 

FDI in HCMC soars in H1

The authorities in HCMC have approved around US$2.9 billion in new foreign direct investment (FDI) in the first half of the year, a 30.7% increase compared to the same period in 2022, reported the city’s Statistics Office.

From January to June, HCMC have issued investment certificates for 514 projects worth a total of US$231 million, a year-on-year rise of 70%.

The number of projects requesting capital revision has soared a staggering 139.7% compared to the previous year at 163, with an additional amount of US$458 million.

The finance, banking, and insurance sectors have attracted the highest foreign investment capital in H1, amounting to US$1.5 billion, or 68.3% of the total.

The real estate market, which has been a key investment sector in HCMC for many years, accounts for a mere 4.5% of the total, with a total investment of US$99.6 million in the six-month period.

Singapore is the top investor among countries and territories having investment projects in HCMC, with 89 projects capitalized at a total of US$126 million. It is followed by Japan and Hong Kong. These three markets account for some 70% of all foreign capital inflows in HCMC in January-June.

Agro-forestry-aquatic products post trade surplus of 4.63 billion USD in H1

Vietnam’s agro-forestry-aquatic product exports raked in 24.59 billion USD in the first six months of 2023, down 11.1% year on year while the country's imports reached 19.96 billion USD, resulting in a trade surplus of 4.63 billion USD, according to the Ministry of Agriculture and Rural Development (MARD).

Currently, five products with the highest trade surplus include wood and wood products with a trade surplus of 4.95 billion USD, down 27.9% compared to the figure of the same period of last year; coffee (2.33 billion USD, up 2.1%); fruits and vegetables (1.85 billion USD, up 2.3 times); rice (1.84 billion USD, up 36.3%); and shrimp (1.28 billion USD, down 36.6%).

Meanwhile, five products with the highest trade deficit include animal feed and raw materials with a trade deficit of 1.97 billion USD, down 4.6%; processed products from crops (1.45 billion USD, up 14.2%); cotton (1.43 billion USD, down 21.3%); corn (1.21 billion USD, down 23.7%); and wheat (993 million USD, up 19.9%).

According to the MARD, in the first half of this year, the main group of agricultural products brought home 12.79 billion USD, up 12%. The exports of livestock products reached 232 million USD, up 26.5%. Aquatic and forestry products still witnessed a deep decline with export value of 4.13 billion USD, down 27.4% and 6.5 billion USD, down 28.2%, respectively.

Up to now, the agriculture sector has had only seven products and groups of products with export value reaching over 1 billion USD each, including coffee, rubber, rice, fruits and vegetables, cashew nuts, shrimp, and wood products.

Regarding export markets, China, the US, and Japan continued to be the three largest export markets of Vietnam's agro-forestry-aquatic products. Particularly, the export value to China enjoyed a positive growth of 7.7% while the export value to the US and Japan decreased by 32.9% and 5.3%, respectively.

Fruit and vegetable exports skyrocket

Vietnamese fruit and vegetable exports during the first half of the year surged by 55.4% to US$2.4 billion compared to last year’s figure of more than US$3.3 billion, equivalent to an increase in turnover of US$851 million, according to the latest statistics released by the General Department of Vietnam Customs.      

Most notably, fruit and vegetable exports during the first half of June saw a remarkable surge of 206.7% to US$361 million against the same period from last year.

Furthermore, durian represents a commodity that has enjoyed very strong growth in recent times following China’s reopening.

Vietnamese durian export turnover has hit US$503.4 million during the opening five months of the year, representing a 18-fold rise compared to last year’s corresponding period and surpassing dragon fruit to become the product earning huge revenue throughout the reviewed period.

Statistics compiled by the General Department of Vietnam Customs indicate that the import and export turnover of Vietnamese goods exceeded US$316 billion during the first half of the year.

The US remains the nation’s largest export market with an estimated turnover of US$44.2 billion, while China is still the largest importer of Vietnamese goods with an estimated turnover of US$50.1 billion.

Squid and octopus exports a bright spot from Japanese market

Despite the first five months of the year seeing the export of squid and octopus drop by 13% on-year, exports to the Japanese market hit US$64 million, marking an annual rise of 4%, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).      

Vietnamese exports of squid and octopus during the reviewed period reached more than US$240 million, a decline of 13% over last year’s corresponding period.

May alone witnessed the export of the product reach US$52 million, a drop of 18% on-year.

Despite negative growth being inevitable amid a general decline of Vietnamese seafood exports, compared to other major seafood products, the export value of squid and octopus recorded only a slight fall.

As of May this year, Vietnamese squid and octopus products have been shipped to 65 markets globally.

The top 10 largest import markets of Vietnamese squid and octopus include the Republic of Korea, Japan, Thailand, China, Hong Kong (China), Italy, the United States, Malaysia, Taiwan (China), Spain, and France.

Exports of squid and octopus to major consuming markets all endured a double digit fall, with the exception of Japan.

Accordingly, the Republic of Korea (RoK) represents the largest import market of Vietnamese squid and octopus, accounting for 35%. In line with this, five-month squid and octopus exports to the RoK hit US$84 million, down 13% on-year.

Japan represents the country’s second largest single octopus and squid import market, accounting for 27% of the total figure.

Compared to the Korean market, Vietnamese squid and octopus exports to the Japanese market recorded positive signs, with squid and octopus exports to the highly-lucrative market throughout the reviewed period reaching US$ 64 million, up 4% over the same period from 2022.

Japan's domestic production of squid and octopus have been decreasing, while the Far East Asian nation's demand for instant and convenient products of squid and octopus has increased due to the modern and busy lifestyles of citizens.

This is factor has positively impacted Vietnamese exports of squid and octopus to Japan.

Along with the Far East country, exports of squid and octopus to smaller markets such as Malaysia, Australia, Taiwan (China), and the Philippines have more positive signals, recording a positive double-digit growth of 15% to 75%.

Generally, the decline in export turnover can be attributed to the impact of inflation and the global economic recession, thereby reducing consumption demand from international markets.

Furthermore, the illegal, unreported and unregulated (IUU) "yellow card" on Vietnamese seafood products has yet to be removed, while exporters of squid and octopus continue to face disadvantages in terms of raw material costs and unfavourable weather for fishing activities.

This reduces the overall competitiveness of businesses as many exporters of these products have had their orders reduced and have been forced to operate in moderation or close some factories.

It is therefore expected that in the third quarter of the year, export activities will be better compared to the previous two quarters.

But the source of raw materials will be difficult because the fishing output in the world's seas is decreasing, along with the ban placed on fishing in the seas starting to take effect, with the next rainy season expected to reduce supply. These factors all represent challenges for enterprises exporting this product.

GSO head points to factors affecting Vietnam’s efforts to curb inflation

An 20.8% increase in the base salary for civil servants, public employees, and members of the armed forces from July 1 will lead to rises in prices of other goods and services, which may put a pressure on curbing 2023’s inflation, according to General Director of the General Statistics Office (GSO) Nguyen Thi Huong.

In an interview granted to the Vietnam News Agency, Huong said that the Vietnam Electricity (EVN)’s possible increase of electricity prices, the Government’s programmes to support economic recovery and step up public investment disbursement, and the recovery of tourism may also affect the price level in the remaining months of this year. 

Regarding factors affecting 2023’s consumer price index (CPI), she said that Vietnam’s import of many kinds of materials whose prices are at a high level will put pressure on businesses’ production, thus pushing up prices of domestic consumer goods.

The adjustment of service prices managed by the State in the direction of correctly calculating all factors and costs into prices of medical and educational services will have a strong impact on CPI, stated Huong.

In addition, prices of food, foodstuff, beverages, garment and textiles, equipment and household appliances often increase in the last months of the year and ahead of the New Year holidays. Natural disasters and epidemics can affect food and foodstuff prices in some localities, which will also make the index increase, she added.

In order to control inflation to reach the target set by the National Assembly, the GSO proposes the Government, ministries, sectors and localities closely monitor price and inflation movements in the world, and promptly warn about risks to domestic prices and inflation in order to take appropriate response measures to ensure supply and stabilise domestic prices.

Ministries, sectors and localities need to prepare adequate supplies of goods, especially food and essential consumer goods and services, to ensure meeting people's needs.

For petrol products, it is necessary to ensure the domestic supply of petrol and diesel, and at the same time control the price of input materials and increase the use of domestic raw materials to gradually replace imported sources.

In addition, the Government needs to select the appropriate level and time to adjust prices of services managed by the State to prevent the resonance of cost-push inflation and inflation expectations.

The Government also should continue operating the monetary policy proactively, flexibly and cautiously, in combination with the fiscal policy and other macroeconomic policies to control inflation. In particular, it is necessary to ensure adequate and timely supply of credit capital for the economy, Huong said.

The GSO head also suggested ministries and branches to step up communication work in order to provide timely and transparent information, create consensus in public opinion on the Government's price management, and stabilise consumers' psychology, and stabilise inflation expectations.

According to Huong, Vietnam successfully curbed inflation in the first half of 2023. Compared to other countries, Vietnam is not in the group of countries with high inflation when its inflation in June increased by 2% over the same period last year.

Digital transformation imperative in trading sector

Digital transformation is vital for businesses in the trading sector to stay competitive in today’s market, and they need to focus their resources and implement it methodically to derive greater efficiency, heard a symposium in Ho Chi Minh City last week.

The boom in digital technologies and the COVID-19 pandemic have changed consumer behaviour from visiting brick-and-mortar stores to buying online, and from paying by cash to digital payments, speeding up retail evolution, they said.

Retailers are increasing their presence on various digital platforms (e-commerce platforms, social networks, etc.) to reach consumers, and technology would continue to play an important role in helping retail businesses evolve to meet the changing needs, they said.

Nguyen Anh Duc, Chairman of the Association of Vietnamese Retailers and General Director of Saigon Co.op, said retailers have accelerated digital transformation post-pandemic, but are facing difficulties due to their limited resources and don’t know how to ensure the transformation dovetails with their resources and market fluctuations and ushers in efficiency.

Foreign retailers possess advantages in terms of capital, technology and expertise, and domestic enterprises are at a disadvantage when trying to go digital, he said.

At the event, the Ministry of Planning and Investment’s business development department introduced a handbook on digital transformation for small- and medium-sized enterprises in the retail and logistics sectors.

A representative of the department said digital transformation has become a pressing issue, particularly since the pandemic drastically changed people's habits and society, requiring organisations, individuals and businesses to adapt.

Tran Vu Trung, senior manager, consulting, at EY Consulting Vietnam JSC, said the handbook provides up-to-date information to support businesses in their digital transformation journey.

It says identifying strategic goals and vision of digital transformation is important for businesses and shape their journey.

After defining strategic goals and visions, businesses need to develop a methodical roadmap to achieve them.

They must build a "digital culture" through communication and training in digital transformation to ensure that managers and employees have a correct understanding of digital transformation and are ready to accept changes in a positive manner.

Qualified human resources are also needed to achieve digital transformation.

Trung said people are the key to effective digital transformation and need to have innovative thinking, the ability to accept change and learning and teamwork capabilities. 

Getting the leadership on board is also important to achieve digital transformation, he said.

There is no best or universal solution, and businesses need to find the right solutions basing on their vision, goals and resources, he added.

The symposium co-organised by the Emulation Group 11 under the city People’s Committee and the Association of Vietnamese Retailers.

More than 4,600 digital transformation domain names issued

More than 4,600 domain names with new domain extensions AI.VN, IO.VN and ID.VN have been issued in the first 19 days since they became available.

Three new domain name extensions associated with digital transformation including AI.VN, ID.VN and IO.VN have been open for people to register for since June 1.

In particular, ID.VN is for Vietnamese citizens registered to promote personal images, products and brands through websites, online CVs, or blogs.

IO.VN is for organisations and individuals to register to use digital technology applications, platforms and services online.

AI.VN is for organisations and individuals registered for activities and services related to the field of artificial intelligence (AI).

Circular 20 dated April 13, 2023, of the Ministry of Finance on the schedule of fees and charges for internet resources took effect from the beginning of this month.

The highlight of the new circular is the preferential policy of fees and charges in the registration and use of domain names in order to facilitate and encourage people and businesses to exploit the values of using .VN domain names. This especially applies to those associated with digital services such as e-commerce, blogging, and email solutions. All of this contributes to the development of the digital economy and society.

A representative of the Vietnam Internet Network Information Centre (VNNIC) said that according to Circular 20, the registration fee for most .VN domain names has been reduced deeply, with the most heavily discounted seeing a 91.6 per cent drop in price.

These incentives are adjusted to ensure wide coverage of users. Businesses and individuals can easily own national domain names and apply them to real use cases such as opening online stores and building personal brands.

In the newly updated circular on June 19, VNNIC said that the new domain name space policy for digital transformation has met the needs of people and businesses.

According to statistics, after 19 days, registrars have issued more than 4,600 domain names with new domain extensions AI.VN, IO.VN and ID.VN, accounting for about 36 per cent of newly-issued domain names in one month.

Notably, VNNIC's data has recorded the trend of personal branding on the internet.

Specifically, immidiately after the new domain name extension ID.VN was opened, there were nearly 2,000 registered domains and now the number is in excess of 3,100. 

Developing high quality human resources for sustainable labour market recovery: experts

Developing high quality human resources is a main solution to help the labour market recover in a sustainable manner, said Director General of the General Statistics Office (GSO) Nguyen Thi Huong.

She noted that despite some positive signals, the labour market is facing great difficulties in the context of prolonged impacts such as the COVID-19 pandemic, the Russia-Ukraine conflict and declining world demand.

Huong cited statistics of the GSO that showed the workforce and the number of workers with employment continued to rise in the second quarter of this year.

The number of workers from 15 years old and above increased by over 100,000 to 52.3 million compared to the previous quarter and by 700,000 compared to the same period last year. The  number of employed workers in the period reached almost 51.2 million, up 83,300 from Q1 and 691,400 from Q2 of 2022.   

The average income of workers in Q2 this year was 7 million VND, which showed only a slight improvement from last year.

However, the development of the labour market is not sustainable, as shown in unstable jobs, poor working conditions and low income, acording to Pham Hoai Nam, director of the GSO’s population and labour department.  

The flow of labour from the formal sector to informal sector is increasing due to increasing layoff of enterprises.

The GSO director general proposed that the Government continue to effectively implement support policies targeting enterprises and workers, launch more events to stimulate domestic demand as well as promote exports, and help seek more export markets.

Nam suggested that ministries, sectors and localities implement measures to develop human resources, reshuffle vocational training facilities to improve training quality and continue to provide vocational training and retraining for labourers. 

Low shrimp prices hit Mekong Delta farmers

Shrimp farming, the leading economic activity in Bac Lieu Province and elsewhere in the Mekong Delta, has been hit by a recent slump in prices.

Ta Hoang Nhiem, chairman of the Bac Lieu Province Shrimp Association, said a 40 per cent drop in prices this year has taken a toll on local farmers.

To cut costs, a number of farms have been discharging untreated water into local water bodies, posing a threat to the environment and even people’s lives, Pham Van Thieu, chairman of the provincial People’s Committee, said.

Fluctuations in exports this year could also lead to a mass closure of household shrimp farms, he said.

The general director of Minh Phu Seafood Corp, Le Van Quang, said many countries are cutting shrimp imports due to the current economic downturn.

“Besides, the relatively high production costs mean Vietnamese shrimp exports are unable to compete with that of Ecuador and India.”

The problem lies in Viet Nam’s low shrimp farming success rate of only 40 per cent compared to 90 per cent and 60 per cent for Ecuador and India, he said.

It is important to focus on high-quality shrimp breeds, reduce the density of farms and adopt proper farming methods to achieve a higher success rate, he said.

Many experts also said that to lower costs, feed prices must be under strict management.

The head of the Viet Nam Directorate of Fisheries, Tran Dinh Luan, said farming households should work with co-operative groups to cut costs, avoid mass harvesting and ensure product quality.

“Shrimp prices are projected to bounce back at the end of this year, and so it is crucial to have reasonable preparations in terms of shrimp seed quality and farming environment.” 

Developing high quality human resources for sustainable labour market recovery: experts

Developing high quality human resources is a main solution to help the labour market recover in a sustainable manner, said Director General of the General Statistics Office (GSO) Nguyen Thi Huong.

She noted that despite some positive signals, the labour market is facing great difficulties in the context of prolonged impacts such as the COVID-19 pandemic, the Russia-Ukraine conflict and declining world demand.

Huong cited statistics of the GSO that showed the workforce and the number of workers with employment continued to rise in the second quarter of this year.

The number of workers from 15 years old and above increased by over 100,000 to 52.3 million compared to the previous quarter and by 700,000 compared to the same period last year. The  number of employed workers in the period reached almost 51.2 million, up 83,300 from Q1 and 691,400 from Q2 of 2022.   

The average income of workers in Q2 this year was 7 million VND, which showed only a slight improvement from last year.

However, the development of the labour market is not sustainable, as shown in unstable jobs, poor working conditions and low income, acording to Pham Hoai Nam, director of the GSO’s population and labour department.  

The flow of labour from the formal sector to informal sector is increasing due to increasing layoff of enterprises.

The GSO director general proposed that the Government continue to effectively implement support policies targeting enterprises and workers, launch more events to stimulate domestic demand as well as promote exports, and help seek more export markets.

Nam suggested that ministries, sectors and localities implement measures to develop human resources, reshuffle vocational training facilities to improve training quality and continue to provide vocational training and retraining for labourers. 

First Biztech Vietnam 2023 to promote digital transformation

The first Biztech Vietnam 2023 conference and exhibition will be organised to connect ‘Business to Business’ (B2B) and promote digital transformation in the business sector on July 6-7 in HCM City.

According to economic reports on the first six months of 2023, Vietnamese enterprises, including IT ones, are struggling to overcome difficulties. Many of them have to find solutions to cut costs and optimise production and business.

The Việt Nam Software and IT Services Association (VINASA) finds it time to promote cooperation and strengthen digital transformation to optimise management, production and business activities. It is not only to overcome difficulties but also create a foundation and competitive advantage in the next stage of business development.

VINASA cooperates with concerned associations and departments, the local industry, and especially the digital technology enterprises to organise the Biztech Vietnam 2023, the largest digital transformation event of the year for businesses.

"Through the event, we expect to directly support enterprises to overcome difficulties, to take part in digital transformation to create competitive advantages," said Nguyễn Thu Giang, VINASA's vice chairwoman and General Secretary.

"Besides guiding and sharing experience in digital transformation, Biztech Vietnam 2023 will be a preferential festival with the use of digital services and solutions for businesses, especially small, medium and micro enterprises (SMEs)."

The event includes seven seminars with nearly 50 speakers and experts discussing digital transformation solutions in business management, customer relationship management, finance and accounting, human resources management, sales, communication and marketing, SMEs, real estate, transportation and logistics. 

Participants will be given updated information, shared knowledge and experience on digital transformation for businesses to improve management efficiency, develop business and enhance customer experience.

The organisers will introduce outstanding digital transformation solutions that have been carefully evaluated. 

Guidelines and advice on effective digital transformation methods for different sizes and kinds of businesses are also available during the two-day event.

The organisers also help to connect supply and demand for digital transformation between the expected 1,000 delegates, 20 exhibitors, and dozens of preferential digital platforms and solutions.

In this event, all enterprises, including 1Office, MISA, Bizfly, Salemall, Ship60; commit at least 30 per cent discount or free to use their services. Meanwhile 100 per cent of participating enterprises will receive incentives and advice on digital transformation. 

Vietnamese Purchasing Managers' Index remains below 50 mark in June

A recently released survey by S&P Global indicates that the Vietnam Manufacturing Purchasing Managers' Index (PMI) rose to 46.2 in June from 45.3 in May.      

This was the sharpest decline since September 2021, indicating the seventh deterioration in business conditions in the past eight months due to weakened demand.

The S&P Global showed that output and new orders fell again, reflecting power outages due to the impact of the heatwave affecting the country, with new export orders falling.

As a result, firms also reduced employment and purchasing activity for the fourth consecutive month, while backlogs of work continued to decline.

According to the survey, on the pricing front, input prices dropped for the second straight month and at the fastest since April 2020. Meantime, output prices fell for the third month in a row and the most since March 2011.

Finally, business sentiment remained subdued, despite picking up from May's six-month low, amid hopes for a recovery in market demand and the securing of new customers, it noted.

Real estate businesses yet to recover

The number of newly established real estate businesses and their capital continued to drop sharply in the first half of the year, equal to less than half of the same period last year.

According to the Business Registration Agency under the Ministry of Planning and Investment, the real estate business continues to be under great pressure, so the number of new enterprises entering the market and newly registered capital decreased by 59 and 54 per cent, respectively on-year.

The number of real estate businesses withdrawing from the market is still high, over 40 per cent on-year, the highest number among 17 fields and industries.

In a report released in early June, the Vietnam Association of Realtors also said that real estate businesses were "drowning."

The Ministry of Construction in recent comments also said that the real estate market had yet to overcome all the difficulties.

The current burdens of real estate businesses contrast with the impressive growth in the number of enterprises entering the market in the first half of 2021, about 45 per cent higher than in 2020.

However, looking at the business picture in general, there are some positive signals in the market. In June, the number of newly established and re-entered firms on the market reached about 21,000 enterprises.

Generally, in the first half of the year, there were more than 113,000 newly established businesses and returning to the market, an average of 19,000 firms per month. About 100,000 businesses withdrew, or an average of 16,600 per month, decreasing by 6 and 13 per cent respectively, compared to the average of the first five months and four months of the year.

"These are positive signals as enterprises' production and business activities are facing many difficulties," reported the Business Registration Agency.

However, the average registered capital per enterprise in the first half of the year only reached VND9.3 billion ($388,000), the lowest in the same period over the past five years. The additionally registered capital also decreased by more than 48 per cent on year.

Burdens in orders, increased inventories, high raw material prices, and weak purchasing power are the reasons why businesses are reducing the need for new loans.

The agency recommended that policies supporting, and promoting trade and removing market difficulties for businesses should be accelerated by ministries and agencies. Because enterprises need solutions to accelerate output for debt payment and to absorb new capital.

Textile apparel sector in dire straits

Businesses in the textile apparel sector face critical times amid sinking domestic and global demand, and a heavy drop in export processing fees.

Cao Huu Hieu, CEO of state-owned group Vinatex, revealed that the current market is in even more critical danger compared to when the COVID-19 pandemic reached its peak in 2020.

Even though the situation was foreseen right in the last quarter in 2022, the actual state was far more severe than already poor expectations.

“Export orders are minuscule, with low processing fees. Never before have businesses with a scale of several thousand labourers had to accept small orders for 500, 700 to 1,000 jackets. But not doing them, then customers will not know about the enterprises, and they won't get any orders,” said Hieu.

The fee for export processing has also fallen. A Vinatex representative unveiled that several apparel items saw up to 50 per cent cuts in processing fees compared to that a year ago.

For instance, in the previous year an item that cost $1.70-1.80 as a processing fee, now costs around 90 cents apiece.

A few firms have even reported that when they have completed processing orders, customers have asked to delay delivery, leaving firms facing difficulties related to cash flow, and finding warehouse for goods storage with additional expenses.

Not only the apparel sector, the spinning segment is also fraught with hardships due to very low demand and a sharp decline in export fibre prices compared to a year ago.

Low prices arrived as the price of cotton, a staple of the spinning industry, has been largely volatile and saw a nosedive compared to a similar period in the previous year.

Spinning firms have reported losses with big inventory, yet still have to hold on to production.

For knitwear production, many units in this segment have not received new orders since April last year.

According to forecast, the textile apparel and fashion industry will face challenging times in the rest of 2023 with a low growth in its sales revenue, ranging from -2 to -3 per cent due to sinking demand in EU markets.

The global aggregate demand for textile apparel products is forecast to approximate $700 billion in 2023, down 8 per cent compared to 2022, even lower compared to 2020 when the pandemic broke out.

Earlier this year, the textile apparel sector gave out two growth scenarios with forecasts that the sector could reach $47 billion in the export value in a positive scenario, and in a less upbeat scenario, the sector’s export value was put at $45 billion.

In the current critical situation, the sector’s export value could tumble to just $36-37 billion, leaving the whole sector to spare no efforts to reach $40 billion in export value following the expectation the global demand would rebound in Q3, and particularly the peak season in Q4.

Last year, the textile apparel sector raked in $44 billion in total export value.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes