State support is crucial to help businesses weather a stormy economic climate.
The ministries of Industry and Trade (MoIT), and Finance executives met in June to discuss measure packages to help businesses, particularly those operating in export, overcome current tough time.
The MoIT executives voiced the need to produce timely forecasts to help export firms become self-reliant in their business. They said local footwear and garment firms were hit by sharp fluctuations in material prices since these firms often signed export contracts four to six months earlier than delivery of the export shipments.
The executives reached a consensus to propose the government gradually ease short-term credit lending rates and give more incentives to export and labour-intensive firms to help them ameliorate competitiveness in the world marketplace.
Besides the proposal, export firms asked for permission to source dollar loans to minimise the borrowing cost in the face of stable [dong-dollar] exchange rate and high dong lending rates.
These proposals, once green-lighted, would help firms remove the bottlenecks to scale up production and export in the upcoming months.
Latest General Statistical Office (GSO) figures show that Vietnam reaped $51.4 billion in total export value in the first seven months of 2011, up 33.5 per cent against the same period in 2010.
The export value in July was tantamount to June’s $8.4 billion and bigger than May’s $7.5 billion. That was the footing for the MoIT to forecast Vietnam’s export value might exceed its 2011 target of $78 billion.
GSO statistics also show higher prices contributed a large proportion to upbeat export figures.
Material import prices, however, also hiked sharply. According to GSO’s Trade and Service Statistics Department, liquefied petroleum gas saw its price hiked 34 per cent in the first seven months while the price of plastics up 19 per cent and yarn up 34 per cent.
Electricity prices and labour costs was all hiked considerably in the past months, denting firms’ profit margins.