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Export value rises 33.7% in first quarter
Export statistics for the first quarter of this year indicated an increase in export value, but enterprises had to cope with a number of difficulties, heard a conference on Apr. 5 organised by the Ministry of Industry and Trade. One of the problems raised among economic experts and exporters was the high interest rate, and trade promotion activities to boost exports were also discussed.
Export value in Q1 reached US$19.25 billion, up 33.7 per cent over the same period last year. Many export items grew in both volume and value. "This growth is relatively high compared to previous years," said Nguyen Thanh Bien, Deputy Minister of Industry and Trade.
Agricultural products witnessed the highest growth, rising 53 per cent over the same period last year to $4.68 billion, while industrial processed products accounted for the greatest proportion of total exports, at $12.27 billion.
"Exports rose in value faster than in quantity due to increasing prices in the international market. These increases contributed $3 billion in export turnover," Bien explained.
More products were exported, but the challenges showed no signs of disappearing. According to Nguyen Huu Dung, Vice President of the Viet Nam Association of Seafood Exporters and Producers, enterprises are truggling to manage loans due to high interest.
"Private equity only meets 10-15 per cent of our total capital needs so we take out loans with banks, but interest rates are too high so we can't raise the funds," said Nguyen Thai Hoc, president of the Viet Nam Cashew Association.
Bien added that interest rates might increase further in Q2.
"In addition, mortgage rates of 30 per cent have forced many companies to cut production," Hoc said, suggesting that they should be lowered to 10-15 per cent.
Some banks are making it easier and more affordable for companies to take out loans. The Viet Nam Development Bank is offering a rate of 11.4 per cent, and Vietinbank is capping lending for strategic clients to five times their equity.
Deputy Minister of Industry and Trade and representatives from the State Bank of Viet Nam (SBV) agreed that the interest rate could not be lowered without putting other banking activities at risk.
Trade promotion activities would be one way to improve exports. "I think trade promotion abroad is unnecessary while organising exhibitions within the country may be more beneficial," Hoc said. Viet Nam should also target foreign supply chains, rather than just showcasing at trade fairs.
A representative from the SBV stated that trade promotion would boost consumption and solve capital needs.
However, the Government said it intended to spend only VND55 billion ($2.62 million) on trade promotion. To secure exports, MoIT is going to start an export insurance fund, with the voluntary participation of enterprises and support from the Government.
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