Industrial production rallies

HA NOI (VNS)— The industrial production index (IIP) increased 6.7 per cent year-on-year in May, placing total growth for the first five months at 5.2 per cent.

This represented an improvement over the first quarter, but still dragged behind last year’s growth, according to the General Statistics Office.

Still, the office’s economic specialist Vu Quang Ha said that the move showed industrial production was rallying after its recent slump.

Manufacturing and processing, which accounted for over 70 per cent of all industrial production, expanded 5.5 per cent in the first five months. But last year, they grew 6.3 per cent.

Some products in these areas saw significant growth, such as casted metals (up 15.3 per cent), leather (up 14.7 per cent), paper and paper products (up 12.7 per cent) and beverages (up 11.8 per cent).

But several major products did not grow and some even declined. Textile fabric rose only 5.5 per cent, crude oil increased a scant 3.3 per cent and raw iron and steel were down 7 per cent.

The consumption index increased 5.7 per cent year-on-year as of May, while the inventory index, though gradually declining, remained high at 12.3 per cent.

The inventory index went up significantly for many major products, such as computers and electronics and optical goods (up 46.8 per cent), electric devices (up 26.3 per cent) and furniture (up 32.2 per cent).

According to statistics office experts, the index was not showing signs of easing, with inventories of produced goods at 74 per cent in April and nearly 77 per cent in the first four months. The secure level is regarded as 65 per cent. — VNS

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Industrial sector slump continues

HA NOI (VNS)— The national index of industrial production (IPP) experienced a year-on-year increase of 5 per cent in the first four months of this year, said the General Statistics Office (GSO).

However, the office said the index’s growth remained low compared with the rate of 5.9 per cent at the same period last year.

The index assesses the processing and manufacturing sector, which accounts for more than 70 per cent of the nation’s total industrial production value. Figures show it surged 5.5 per cent followed by a modest reduction of 0.5 per cent in comparison to the first four months of 2012.

The production of steel decreased more than any other product, dropping 11.5 per cent. Textile industry output plunged 9.6 per cent while televisions production slumped 7 per cent.

The low indices show that the industrial sector still faces difficulties brought by the global economic downturn. This has led to a slump in purchasing powers in both domestic and foreign markets, the GSO said.

Great efforts to reduce domestic stockpiles of goods have led to decreases in industrial production, especially in the processing and manufacturing sectors, since the beginning of this year.

As of April 1, the inventory index for the two sectors saw a 13.1 per cent year-on-year rise, down 3.4 per cent from the previous month and 19 per cent in comparison with same time last year.

To overcome difficulties, experts recommend that industrial producers restructure production so they can churn out high-quality products and sell them to a wider market.

They also suggested the Government provide firms with easier access to capital and improve tariffs and the business environment. — VNS

Lao maintains strong growth rate, quality of growth becoming more important, ADB says

(KPL) The economy of the Lao PDR is expected to expand by around 7.7 per cent in 2013, as resource-based industries, manufacturing and services continue to generate solid growth, say a key Asian Development Bank report.

“The Lao PDR will continue to see solid growth in the next few years, building on the achievement of the last five years or so,” says ADB Country Director Chong Chi Nai.” Going forward, the challenge will be to shift the focus from absolute growth levels to the quality of growth to ensure that the Lao PDR will follow an inclusive and sustainable growth path”.

Rising private consumption and stronger intraregional trade will spur a pickup in growth in developing Asia in 2013 and 2014, as economic activity in the US and Europe remains in the doldrums, the ADB says in its flagship annual economic publication, Asian Development Outlook 2013 ( ADO).

Economic growth of 7.9% in 2012 was supported by expanded mining outputs, with copper production up by about 8% and gold production up by 61 %, while hydropower output jumped by 29%. Reflecting increased construction activities, cement production increased by 42 % during the year, while tourist arrival increased by 22 % to 3.3 million. Agriculture growth was 2.5 % resulting from increased production of cassava, maize, poultry and livestock. Rice production declined slightly as a result of flooding. Average inflation was 4.3% in 2012.

Looking forward, substantial investment flowing in to hydropower and mining, coupled with the construction of hotels, offices and residential buildings will drive GDP growth. Hydropower plants completed last year will contribute an expected 12 % increase in power generation in 2013. Agriculture, which employs over 60 % of the workforce, is expected to grow at a fast pace this year, as rice production recovers and animal husbandry continues to expand. Tourist arrivals are projected to grow by 10-15%.

“The outlook for 2013 for the economy of the Lao PDR is strong, as we see the economy starting a gradual diversification from its overdependence on the natural resources sectors,” Mr. Chong says. “Increased agriculture productivity is important to remain on this path. However, the current focus on a small number of crops, such as rubber and eucalyptus, endangers biodiversity and food security in the country. Increasing production of more traditional food crops and ensuring their domestic and international marketing remains a top priority for the sector.”

The ADO 2013 project strong economic activity in the Asian region to spur renewed price pressures, with inflation seen moving up from 3.7% in 2012 to 4% in 2013 and 4.2% in 2014. For Lao PDR, a benign 5.5% inflation is forecast for 2013. Price pressures remain manageable for now, but will need to be monitored closely, especially as strong capital inflows raise the specter of potential asset market bubbles.

Vietnam’s economy to grow by 5.6 pct in 2014: ADB

In its Asia Development Outlook Report 2013 announced on April 9, Asian Development Bank (ADB) forecasted Vietnam’s gross domestic product (GDP) growth at 5.2 percent this year and it would be 5.6 percent in 2014 if achieving progress in strengthening the banking sector and the recovery of large industrial economies would create motivation in 2014.

The ADB also forecasts Vietnam’s inflation in 2013 will fall slightly to an average of 7.5 percent before rising to 8.2 percent in 2014.

Average annual inflation is expected to be about 7.5 percent in 2013, lower than its previous forecast due to lower than expected domestic demand. The forecast was given on an assumption that the weather conditions are favourable for food production, the forex rate is relatively stable and stimulation policies are controlled.

The country’s trade surplus is expected to reach a record of $12.5 billion in 2013 and the current account balance surplus would continue to increase this year before easing slightly in 2014 as imports accelerate in parallel with GDP growth.

Addressing at a press conference to announce the Asia Development Outlook Report 2013, Tomoyuki Kimura, ADB Country director in Vietnam, said that Vietnam’s ability to remain competitive and promote economic growth at 7-8 percent will depend on the successful implementation of structural reforms and more comprehensive improvement of business environment.

According to Tomoyuki, despite Vietnam’s economic growth in 2012 at the 13 – year low, which forced the authorities to apply the easing monetary policy, credit growth is still limited by the uncertainty about the financial situation of the banking system. The economic recovery depends on promoting the reform programmes for the banking system and state-owned enterprises (SOEs).

When the landmark for Asean integration in 2015 is approaching, Vietnam is facing the increasing competition in attracting FDI capital sources in Southeast Asia. However, he also said that Vietnam still remains an attractive destination for foreign investments due to the abundant size of the population in working age on the rise and the low labour costs. This is evidenced by the general increasing trend of FDI capital attraction in the past decade.

Cambodia’s economy to grow by 7.2 pct in 2013, stronger in 2014: ADB

Cambodia’s economic growth is forecast at 7.2 percent in 2013, picking up to 7.5 percent next year as recovery in Europe and the United States takes hold, according to the Asian Development Bank’s annual economic outlook released on Tuesday.

The United States and Europe are the largest purchasers of Cambodia-made garment and footwear products.

“European demand for Cambodian garments and footwear is expected to maintain good growth, supported by duty-free access to the Europe,” the report said. “Shipments to the U.S. will likely be subdued this year, but should pick up after that.”

Cambodia’s economy is mainly supported by four main sectors– garments, tourism, real estate and construction, and tourism.

“Domestic consumption, exports and investment, especially foreign investment, will all drive growth this year and next year,” Peter Brimble, ADB deputy country director and senior country economist, said during the report release.

The report noted that net foreign direct investment (FDI) inflows into Cambodia surged by an estimated 75 percent in 2012, to 1.5 billion U.S. dollars, funding new industries including automotive parts, electronics, and processing of agricultural products, as well as diversifying garment production into higher- value products and tourism into new areas.

It said that about 23 percent of the total FDI inflows into Cambodia last year came from China, and the rest came from other countries in ASEAN, Asia and Europe.

ADB senior economics officer Poullang Doung said Tuesday that the industry sector as a whole is expected to expand by 10.5 percent in 2013, while the service sector is expected to grow by about 7 percent, with strong growth in tourism and real estate activity.

Agriculture is likely to grow by 4 percent, assuming favorable weather, he said.

He added that the inflation rate is expected to average 3 percent this year, assuming stable domestic food prices, and rising to 3.5 percent in 2014 due to robust domestic demand.

Cambodian secretary of state of the Ministry of Economy and Finance Hang Chuon Naron said Tuesday that the government projected that the country’s GDP is expected at 7 percent this year, driven by garment exports, tourism, agriculture, real estate and construction.

“We expect that Cambodia will get out of the classification of a low-income to a lower-middle-income country at the end of this year,” he said.

Lower-middle-income countries are those with GDP per capita between 1,006 U.S. dollars and 3,975 U.S. dollars, as defined by the World Bank.

Last year, the country’s GDP growth was 7.3 percent and the GDP per capita was nearly 1,000 U.S. dollars, he said, forecasting that the GDP per capita will increase to 1,080 U.S. dollars this year.

While Cambodia’s growth prospects remain positive, chronic poor health and malnutrition is stunting the growth of 40 percent of Cambodian children, the ADB’s report warned.

“Left unaddressed, Cambodia’s continuing high incidence of child malnutrition will negatively affect future productivity and economic growth due to the associated irreversible long-term damage to physical and cognitive development,” it said.

By Wang Yuanyuan │ 09 April 2013 │ Xinhua News

Vietnam’s manufacturing rebounds in March: HSBC report

HANOI, April 1 (Xinhua) — The manufacturing sector of Vietnam edged back into expansion in March, with the Purchasing Managers’ Index (PMI) posting a 23-month high of 50.8, reported Vietnam news agency on Monday, citing the Hong Kong and Shanghai Banking Corporation (HSBC) analysis.

March data pointed to modest recoveries in the levels of both manufacturing production and new orders, following contractions in the previous month.

Companies benefited from an improving domestic market, increased promotional activity and a slight expansion in the level of incoming new export orders, the bank said.

New export orders increased for the first time in 11 months during March. Manufacturers linked the latest growth in new export sales to improved demand from clients in China, Japan and Thailand.

Growth of new orders and production filtered through to the labor market, with March seeing employment rise for the fifth time in the past six months.

Input cost inflation surged higher during March, amid reports of increased prices on international commodity markets.

Part of the increase in input prices was passed on to clients in the form of higher selling prices. Output rate of contraction charges rose for the second successive month and at the fastest pace since April 2012. However, the rate of increase in selling prices remained well below that of input costs.

Vietnam manufacturers maintained a preference for reduced inventory holdings in March, leading to further depletion of both raw material and finished goods stocks. In contrast, purchasing activity was raised for the second time in the past three months, reflecting increased production.

Trinh Nguyen, an economist at HSBC said March’s expansion of manufacturing output is consistent with the bank’s view of a gradual recovery in Vietnam.

The process is likely to be bumpy, however, she said, adding that what’s most positive moving forward is a rebound of external demand, which should help counterbalance weak internal demand in the coming months.

By  Xu Rui  |   2 April 2013  |   Xinhua

Telephones rank top in Vietnam’s export revenue in Q1

HANOI, April 2 — Telephones and spare parts export for the first time surpassed garment and textile to top Vietnam’s export value in the first quarter this year, according to data from the Vietnam’s General Statistics Office on Tuesday.

Specifically, in the three-month period, Vietnam pocketed over 4.48 billion U.S. dollars from telephones and spare parts export, an increase of 89.8 percent over the same period last year, while exports of garment and textile posted 3.79 billion dollars, up 18. 5 percent.

With this growth rate, telephone exports are expected to claim the first title in the country’s total export revenue in 2013.

The strong growth of telephone exports are attributed mostly to the foreign-invested enterprises, including Samsung and Intel.

In late March, Samsung Electronics Vietnam started construction of its second hi-tech complex in northern Vietnam’s Thai Nguyen province, of which is a 2-billion U.S. dollar handset and hi-tech electronic products plant.

Samsung’s first hi-tech complex project in northern Bac Ninh province manufactures some 11 million products per month, with 90 percent of those for export. In 2012, its export value totaled at 12.6 billion U.S. dollars, nearly doubling the figure in 2011.

By  Jane B. Hatcher  |   2 April 2013  |   Xinhua