Striving to maintain export momentum

Prices of export commodities in March in particular and in 2012 in general showed a decline after a sharp increase in 2011, concluded Nguyen Nam Hai, Vice Minister of Industry and Trade at a monthly meeting held yesterday by the Ministry of Industry and Trade.

This will create a negative impact on businesses, especially those   that depend on imported raw materials and equipments.

In addition, though bank interest rates have been lowered, small and medium enterprises still find it difficult to borrow.

Nguyen Nam Hai, Vice Minister of Industry and Trade also informed that  in the first quarter of 2012, the trade deficit was merely US$ 251 million, lower than during the same period in 2011 ($3.3 billion).

Meanwhile, export volumes in the first quarter of 2012 reached $24.5 billion, an increase by 23.6 per cent in comparison to the same period in 2011.

Other optimistic signs expected to raise export volumes included sufficient supplies of imported products in the market.

Several state as well as the private sector enterprises strive to maintain the export momentum (Photo: SGGP)

However the report of the Ministry of Industry and Trade pointed out that the trade surplus decreased due to drop in consumer goods and the economic recession.

It is vital to find new markets for export; and state as well as the private sector must strive to maintain the export momentum, the ministry said.

When global prices fluctuate and when global raw material prices rise and fall, these enterprises would be allowed to increase prices of their products to keep up with the inflation.

Vo Van Quyen, Head of the Department of Domestic Market under the Ministry of Industry and Trade, anticipates that inflation in April is expected to rise by a one-month rate to as much as 0.5 per cent, representing an increase over last month's very gradual increase in the consumer price index of just 0.16 per cent.

The recent increase in energy prices, including petrol, is likely to lead to inflation. Higher transport and distribution costs have already led some major retailers to increase retail prices on goods by 3 to 4 per cent in recent days, and rising healthcare costs have also fueled inflation.
Only a declining trend in gas prices worldwide has allowed domestic cooking gas distributors to plan price reductions of an estimated 16 per cent this month.

At the Government monthly meeting last Saturday, the Ministry of Finance reaffirmed that goods subject to State price control or required by the State for public purposes or national programmes, would continue to be closely monitored between now and the end of the year.

Prices of other consumer products, including agricultural and food products, would continue to be set by the market, with all price control systems to be lifted gradually, according to the ministry.

Electricity rates would only be allowed to increase slightly and would not be adjusted to reflect disparities between domestic and foreign currencies or the power industries accumulated losses in 2010, the ministry said. Coal prices would also be adjusted to the equivalent of 90 per cent of the price for comparable types of coal for export.

Costs of healthcare, education and other public services would be allowed to increase according to market forces in order to ensure that providers remain solvent and provide high-quality services, the ministry said.

Source SGGP - Translated by Dan

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