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Consumers spend less as costs spiral
This year's festive season is predicted to be less hectic than usual as people experience lower purchasing power.
The majority of the population has to tighten their belts as they cope with pressure created by continuous increases in exchange rates and interest rates.
Nguyen Thi Linh in southern Binh Duong Province's Di An District said the average monthly for her and her husband was about VND5 million (US$238). They'd been able to save VND1 million each month earlier in the year, but now the price hikes have made any saving impossible.
Dang Thuy Chi of District 4 also said that her salary this year had not increased, while prices of all commodities and services have soared, so she had to be careful in calculating expenses for the coming Tet Festival.
"In previous years, when the Tet came I always tried to buy valuable gifts for family members, but this year I only plan to buy a washing machine for my mother to make her work less strenuous," Chi said.
Many customers have cancelled orders that they'd placed with him because their Tet bonuses as well as other income sources was less than expected, said Huynh Van Linh, a carpenter in Thu Duc District.
This also meant that Linh's income would decrease, and he would have to cut down on all unnecessary expenses.
Though still single, accountant Mai Ngoc Kieu also plans to cut her Tet expenses since she is worried that commodity prices would further increase after the festival.
Luong Thi Nga, who sells confectionery at a market near the Song Than Industrial Park, said at this time in previous years, she'd sold sweets worth millions of dong to IP workers every evening.
But this year, the sales volume is very modest since the incomes of most IP workers were just enough to make ends meet. They did not dare to buy things that were not essential, Nga said.
Market research firm TNS Viet Nam has said that since the global economic crisis hit last year, the relationship between consumption and saving in Viet Nam has changed, with the former decreasing noticeably. Eating out, entertainment and purchases of electrical utensils are areas that have seen strong expenditure cuts among customers in 2010, the firm said.
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