VietNamNet Bridge – While the Government is fairly upbeat on the country’s economic outlook, the National Assembly casts a somber view on the lingering woes.

In a report delivered at the National Assembly (NA) sitting that began in Hanoi on Monday, Prime Minister Nguyen Tan Dung asserted that the economy was still faring well with improvements seen in macroeconomic indicators.

Robust developments

The Government leader observed that foreign direct investment had grown 36% year on year in the January-September period, while FDI disbursement had risen 6.4% on year. He noted that FDI now accounted for 25% of the total investment in the economy.

Industrial production in the nine-month period increased 5.4% year on year, while the industrial inventory index had slowed to 9.3% as of September 1, 2013 compared to 21.5% by January 1.

Export performance was a bright spot, according to the Government.

In the nine months, export sales totaled US$96.5 billion, growing 15.7% on year. Local enterprises saw their exports back on the recovery track, earning US$32.5 billion, or a rise of 4.4% on the year-ago period, while foreign-invested enterprises shipped abroad US$58.4 billion worth of commodities, up 27% on year.

The service sector in the nine-month period grew 6.25% compared to 5.66% in the corresponding period of 2012.

The Prime Minister in his report admitted that revenues for the State budget were falling. The ratio of State budget revenues to GDP was 25.1% in 2011, some 22.3% in 2012, and an estimated 20.5% this year.

PM Dung estimated that the ratios would fall further in 2014 and 2015 as the corporate income tax rate is slashed to 22% from the previous 25%.

However, Dung noted that the falling budget revenue was reasonable as enterprises need to be given a helping hand in financial terms to survive the tough time.

Concerns from NA

The NA, however, was downbeat on the economic outlook, given lingering difficulties facing the business community, according to a report given by Nguyen Van Giau, chair of the NA Economic Commission.

“The situation of enterprises having to scale down production is continuing,” said Giau.

The total number of enterprises that went bust or shut down business has amounted to over 60,400 compared to 60,900 as the number of newly-established enterprises plus the number of those existing entities that have resumed business, Giau said.

Even those that remain in business are finding themselves mired in financial problems.

Giau, citing a report by the Ministry of Finance, reported that the number of money-losing enterprises in the second quarter accounted for 66% of the total number of enterprises that had submitted tax declaration forms. The total amount of losses in the second quarter was 7.5% higher than that in the first quarter and 11.9% higher than the average quarterly losses in the previous year.

In addition, the number of laborers claiming for unemployment benefits rose strongly to 283,000 in the year’s first seven months compared to 295,000 in the whole 2012.

Giau stressed that after years grappling with difficulties, many mid-sized enterprises have succumbed to economic woes and have shut down business, exerting greater pressure on employment for laborers and revenues for the State budget.

Source: SGT