Vietnam’s economy situation in May and 5 beginning months of 2005

1. Output of agriculture, forestry and fishery

Agriculture:

Winter-spring paddy: During May provinces in the South have focused on harvesting winter-spring paddy, the productivity is estimated at 5.9 tons per hectare, increasing by 230 kg/ha over same period last year; the output: 10.6 million tons, increasing by 267,000 tons. Of which provinces in the Mekong Delta have finished the harvest with an estimated productivity of 6.14 tons/ha, increasing by 270 kg/ha, output: 9 million tons, increasing by 470,000 tons. Long and unfavourable drought has impacted on the output of winter-spring paddy in the coastal south center, central highlands and south east regions. Generally for these three regions, rice areas reduced by 37.4 thousand hectars ahainst same crop last year; productivity reduced by 76 kg/ha, output by 203.9 thousand tons.

For provinces in the North:  estimated 1,150,000 hectares of winter-spring paddy  were cultivated, reduced by 12.9 thousand hectares of which provinces in the Red River Delta reduced by 12,500 ha due to lacking of water, so a part of the areas was used for growing other crops. However, areas for winter-spring paddy in the north east region increased over last year due to having enough sources of water.

Summer-autume paddy: In line with the winter-spring paddy harvest, areas under cultivation of summer-autume paddy in provinces in the South were 1077.1 thousand ha, equaling 92.2% of last year’ same period, the Mekong River Delta- 980.6 thousand ha and 94%.

Other crops: As of middle of May, in the whole country there were 560.5 thousand ha of maize under cultivation, equaling 105.1% of last year’ same period, sweet potato area- 120.1 thousand ha and 86.7%; peanut area- 183.6 thousand ha and 99.1%; soya area- 110.1 thousand ha and 126.1%; tobaco area- 14.8 thousand ha and 91.9%; area for newly planted sugarcane- 32,000 ha and 111.5%; vegetables and beans area- 389,000 ha and 95.6%.

According to the animal breeding survey 1/4/2005, the whole country has 26 million pigs, increasing by 4.9% over last year’ same period and equaling 99.5% of the pig herd at 1/8/2004, of which porkers increase by 6.5%, sows by 5.9%. Cattle herd tend to rapidly increase owing to the incentive policy for developing raising of cattles, that farmers can lend money from banks to buy breeding cattles. Domestic fowls bgin to recover but slowly. An estimation shows an increase over last year’ same period but mainly in small-scale households.

Forestry

Generally for the 5 months, care of forest takes 99.8% over last year’ same period; reforestation- 99.7%; dispersed plantation- 99.8%; concentrated plantation- 99.8%; wood cutting production- 100.1%.

Fishery

Production of fishery for the 5 months of 2005 is estimated at 1,320.3 thousand tons, increases by 5.8 % as compared with last year’ same period., of which farmed products achieve 347 thousand tons, increasing by 12.4%, caught products- 893.3  thousand tons, increasing by 3%.

2. Industrial output

Industrial production value for the 5 months of 2005 increases by 15.4% against last year’ same period, attaining 177 trillion VND (at 1994 prices); of which state-owned enterprises achieve 58.36 trillion VND, increasing by 10.4% (central state-owned enterprises- 40.85 trillion VND and by 11.8%; local state-owned ones- by 3.9% increased); non-state sector increases  by 24.4% and foreign invested sector by 13.1% (crude oil and gas decrease by 9.4%; others increase by 21.2%).

The increased rate of industrial production in large cities in general is higher than the average 15.4%. However, industrial production of HCM City that accounts for ¼ of the country’s total industrial production value is estimated to increase by 12.5% only. Generally over the country, local industry increases more rapidly, mainly in private sector while state-owned enterprises continue to increase their production value at a lower rate (+ 3.9%) over last year’ same period since the changing process of state enterprises into other types of ownership is going ahead rapidly, especially in some provinces state owned enterprises under their management decreases rapidly: Vinh Phuc accounts for 26.4% only, Hai Phong 85.5%, Hai Duong 69.9%, Phu Tho 87.1%, Quang Ninh 83.1% and Da Nang 93.2% as compared with same period last year.

3. Investment and construction

Capital construction investment under the concentrated State budget of 5 early months in 2005 is estimated at 20,602.9 billion VND, accounting for 39.7%% of the year plan. Central investment gained 8,755.5 billion VND, accounting for 44% of the year plan, of which the Ministry of Transportation gained 2,907 billion VND, equaling 50.5% of the year plan; the Ministry of Agriculture and Rural Development: 841 billion VND, equaling 46%, and local investment- 11,847.4 million VND, equaling 37% of the year plan (Hanoi- 1,255 billion VND, equaling 29%; HCM City- 2,296.7, equaling 30.8% of the year plan).

Foreign direct investment: from 1^st January to 20 May 2005 there have been 259 newly granted licence projects with a total capital registered 1,685.9 million USD, increasing by 37.8% in number of projects and 171.3% in the capital registered increases over last year’ same period (there were 188 projects with total capital registered 621.5 million USD in the 5 beginning months of 2004). Average scale on a project licensed achieves 6.5 million USD that are almost twice the rate 3.3 million USD per project last year’ same period. Of the total, the industry and construction occupy 71% in projects and 44.9% in capital; similarly, the agriculture, forestry and fishery  7.7% and 2.2%; the service sector 21.3% and 52.9%.

4. Transportation

Passenger carriage in the 5 months of 2005 is estimated at 452.1 million people and 19.4 billion passengers-kilometres, increasing by 4.4% in persons carried and 10.7% in passengers-kilometres as compared with last year’ same period.

Freight carriage is estimated at over 112.1 million tons and 28.6 billion tons-kms, increasing by 5.3%  in tons carried and 7.2% in tons-kms against last year’s same period.

5. Trade, price and tourism

Total retail sales of goods and services in the 5 months is estimated at 179.5 trillion VND at current prices, increasing by 18.8% against last year’ same period (if the raising price factor is excluded, the rate is over 9%) of which the state sector gains 24.2 trillion VND, decreasing by 1.3%; the collective sector: nearly 2 trillion VND, increasing by 41.6%; Household 113.5 trillion VND, increasing by 19.1%; the private sector: 35.4 trillion VND and 32.9%; the FDI sector- 4.4 trillion VND and 36.5%.

Consumer price in May raises 0.5% against last month: food and foodstuff-  0.6% (contributing +0.29 point %); housing and building materials, and drinks, tobaco- 0.8% (contributing +0.15 point %); medical products and health care service  and means of transport and communication- 0.4%; culture, sports and entertainment- 0.2%…As compared with December 2004, consumer prices in May 2005  increase by 4.8%, of which prices for all consumer goods and services raise: food and foodstuff 7.2% that is the main group contributing to high prices.

For the 5 beginning months of 2005, export turnovers are estimated at 11.97 billion USD, accounting for 39% of the year plan and increasing by 20.4% as compared with last year’ same period. On average, export turnover per month gains about 2.39 billion USD only. (To reach the goal of 30 billion USD for 2005, each next month should gain about 2.6 billion USD). The rate excluding crude oil is estimated to achieve 9.15 billion USD, increasing by 15.9% of which domestic sector achieves 5.17 billion USD, raising by 11.6% and foreign invested sector 3.98 billion USD, increasing by 22%.

Export turnovers of 20 of 26 items of export goods increase in comparison of last year’ same period. However, some main items like garments, footwears and seafood increase but at lower rates than expected rates.

Import turnovers for the 5 months are estimated at 14.56 billion USD, increasing by 21.2% against last year’ same period: domestic sector 9.45 billion USD and 21.6%; foreign invested sector 5.11 billion USD and  20.5%. Importation of machinery and equipment, tools and spare parts, raw materials for domestic production also increase over  last year’ same period.

Trade deficit in the 5 months is 2.59 billion USD, equaling 21.6% of export turnovers (20.5% in same period last year).

International visitors to Viet Nam for the 5 months are estimated at 1,379.7 thousand arrivals, increasing by 19.4% over last year’ same period of which arrivals for tourism are 826.5 thousand, increasing by 35.8%; for business: 171.9 thousand, decreasing by 16.6%; for visiting relatives 213 thousand, increasing by 7% and for other purposes 168.3 thousand, increasing by 18.9%.

6. State Budget

Total government revenues in the first 5 months are estimated at 44.6% of the year’s budget plan. Domestic revenue achieve 43.1% of which major receipts from such areas as foreign invested enterprises  (excluding crude oil) 43.7% of the year’s budget plan; commerce, industry and non-state service taxes- 43.4% ; personal income taxes applied for high income persons: 47.6%; housing and land taxes: 51.7%; stae-owned enterprises 40.6% only. Revenue from crude oil increase rather highly, being estimated at 52.6% of of the year’s budget plan since crude oil prices are stable at as high level as at the time of making budget plan. Budget balance revenues from exportation and importation are 41% of of the year’s budget plan, of which export-import taxes and special taxes for imports are 45.1%; VAT for imports (already minus VAT refunding) 35.9% only.

Total government expenditures in the first 5 months are estimated at 39.3% of of the year’s budget plan: new development and investment spending 35.4% (expenditure for capital construction: 35.1%); current spending 42.3%. Big and significant current spendings are generally at high rates to the  year’s plan: for education and training 41.8%; for pensions and social insurances- 42.3%; for economic development 45.5%; for administration 42.6%; for health care 41.6%. Overspending for the 5 months is estimatedly equal to 21.1% of the planned overspending rate for the year, which is compensated with home borroings 80.6% and foreign borroings 19.4%.