MPI says economy betters, MOIT says industrial production decreases

While the Ministry of Planning and Investment (MPI) keeps optimistic about the national economy by citing the high index of industrial production IIP, the Ministry of Industry and Trade (MOIT) believes that the industrial production has decreased and that a lot of businesses have to stop their operation.

At the MPI’s meeting held on October 26, officials heard the ministry’s conclusion that basically, the macro economy is getting better off.

According to the ministry, the IIP has increased considerably by 7 percent in the first 10 months of the year in comparison with the same period of the last year. Especially, the IIP in processing industry increased significantly by 10 percent.

In general, agriculture, forestry and aquatic industries have been developing well, while there is nothing blamable in the development of the service sector. Especially, import and export has witnessed impressive growth rate of 30 percent. The inflation rate in October dropped to the 4-month deepest low, while more and more investors still register their new business.

However, officials from relevant ministries and branches believe that the reality is not as good as shown by the released figures.

Industrial production up or down?

Rejecting the satisfactory industrial production situation mentioned in the MPI’s report, Deputy Director of the Planning Department under MOIT Nguyen Thanh Hoa said that what MOIT can see is that the industrial production is going down.

Sharing the same view with Hoa, Deputy Director of the Hanoi Planning and Investment Department Nguyen Van Tu, has confirmed that the industrial production growth rate has been slowing down if comparing the figures of January, May and October. Meanwhile, in previous years, the industrial production always increased towards the end of the years.

The IIP that MOIT has can show that the industrial production is still experiencing through a hard time. The IIP growth rate of September dropped to the May 2011’s level of 67.2 percent. Only August saw the IIP recovering well after the weak June and July. However, the IIP once again has resumed its downward trend, erasing all the little periods before.

The situation has been worsened by the low purchasing demand. The latest surveys show that the industrial stock index has increased dramatically, according to the General Statistics Office GSO.

Meanwhile, according to Deputy General Director of GSO Nguyen Bich Lam, the total revenue from goods and service retailing in the first 10 months of 2011 was 1561 trillion dong, an increase of 23.1 percent over the same period of the last year. However, if not counting on the price increases, the actual growth rate would be 3.9 percent only, a very low level if noting that in previous periods, the growth rates were 7-8 percent at minimum, and 13-15 percent at maximum.

Therefore, no one can say that the business is going in favorable conditions

More businesses stop operation

According to MPI’s report, in the first 10 months of the year, 63.92 thousands of new businesses were registered with the total capital of 397.2 trillion dong. The report did not provide the figures of the previous years for comparison. However, if referring to the report of the ministry released at the government’s meeting in October 2010, one would see that the number of newly registered businesses was lower by 10.6 percent.

Especially, the comparison can show the sharp fall in the registered capital of 64.8 percent. This shows that newly set up businesses are mostly small ones in terms of financial capability.

Meanwhile, Deputy Minister of MPI Nguyen Van Trung cited the statistics provided by the taxation bodies that of the 57,000 newly registered businesses, 47,000 have stopped their operation.

“This means that only 10,000 businesses can survive, the thing that has not been seen before in the last 20 years,” Trung said.

Tu agreed, saying that in Hanoi alone, 3000 businesses have stopped operation out of the 14,500 businesses registered in the first 10 months of 2011.

Source: TBKTVN

Tags: Vietnam industries, Vietnam industry