Vietnam’s industrial production index tumbles

HANOI – Vietnam’s industrial production index sharply declined in the first four months of this year while the inventory index accelerated.

According to the General Statistics Office (GSO), the national industrial production index rose only 4.3% compared to the same period last year, which was far lower than the 10% in 2011 and 7.9% in 2010.
Notably, some provinces and cities directly under the central Government with a large industrial scale posted low growth rates, including Hanoi with 4.1%, HCMC 3.7%, Danang 2.4%, Dong Nai 6.7%, Hai Duong 5.9% and Binh Duong 5.7%.
The office pointed out that the nation’s coal production was hard hit by slow consumption on both local and overseas markets. Coal volume dropped 3.3% against the previous year, coal exports fell 4.2% while clean coal inventory increased by 9% to six million tons in early April.
Meanwhile, the national inventory index soared up, especially in the processing industry. The sector suffered poor results due to economic difficulties, low demands, narrow export markets and high lending rates.
As of April 1, the sector saw inventory index jumping 32.1% against the previous year whilst falling 0.5% month-on-month.
Some sectors saw a relatively high inventory index such as production from ready-made metal up 101.5%, processing and preservation of fruit and vegetables up 94.8%, production of fertilizer and nitrogen compounds up 63.4%, production of iron and steel up 44.2%, production of tobacco products up 90.8%, production of cement, lime and plaster up 44.2% and production of motor vehicles up 31.6%.
To ease the hardship, GSO suggested expanding consumption markets inside and outside the country to reduce inventory and stimulate production. It is necessary to open the retail network for domestic goods in localities.
The agency also proposed an interest rate subsidy policy along with lending rate cuts to make businesses, especially small and medium-sized firms, accessible to capital sources.

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