Vietnam’s economy has seen improvements in the first three months of this year but a lot of difficulties remain ahead, especially for businesses.

The conclusion was made during a meeting between the Ministry of Planning and Investment (MPI) and relevant ministries, agencies and localities in Hanoi on March 26.

According to participants, one of the silver linings in the first-quarter economic panorama was that the country’s export turnover reached nearly 29.7 billion USD, up 19.7 percent against the same period last year and equivalent to 24.5 percent of the yearly target.

Of which, that of foreign-invested businesses (excluding crude oil) was close to 17.4 billion USD, representing a year-on-year increase of 27 percent and accounting for 58 percent of the country’s total.

Economic experts said the export growth in the period under review maintained a rate higher than the import growth (17 percent) and the 10-percent target set by the National Assembly.

Staples such as crude oil, garments, coal, wood, phones and electronic parts continued to record high export growths.

The export growth was largely thanks to the FDI sector, which has maintained its high growth during the past four years.

According to the MPI’s Foreign Investment Department, by March 20, the country had 191 licensed projects with a total registered investment of nearly 3 billion USD, up 2.2 percent year-on-year, and 71 projects had added a total 3.1 billion USD to their investment, marking a 3.7-fold increase over the same period last year.

The GDP growth was estimated at 4.89 percent while that of the same period last year stood at 4.75 percent. The service sector recorded the highest growth of 5.65 percent, followed by the industrial and construction sectors with 4.93 percent and the agro-forestry-fishery sector, 2.24 percent.

However, the economy also faced numerous difficulties, especially for industrial production and business development.

In the first quarter, the industrial production index rose only 4.9 percent over the same period last year. Of this, the index of the mining industry increased 2.1 percent and that of the processing and manufacturing, 5.4 percent, and electricity production and distribution, 9.4 percent.

Meanwhile, the development of businesses also saw a lot of difficulties. As many as 15,707 new businesses were registered with a combined capital of over 79 trillion VND (3.78 billion USD), down 6.8 percent in number and 16.1 percent in capital compared to the same period last year.

According to Deputy Minister of Planning and Investment Dang Huy Dong, there should be stimulus packages to boost consumption and reduce inventories so as to ease the situation.

Despite a decrease in inter-bank interest rates and the State Bank of Vietnam (SBV)’s policies to support production, businesses still find difficulties in accessing low-interest loans, he said.

As inventory and bad debt issues are not solved immediately and guarantee funds for small- and medium-sized enterprises have not started working in many localities, banks should make detailed assessments on businesses’ production in order to put these funds into operation, said Pham Xuan Hoe, a representative from the SBV.

Hoe emphasised the need to activate the real estate market, suggesting the SBV coordinate with the Ministries of Construction and Finance to build an inter-sectoral circular that allows the mortgage of assets to be acquired.

Tran Xuan Hai from the Ho Chi Minh City Department of Planning and Investment proposed that banks continue to lower lending interest rates and increase disbursement for businesses.-VNA