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Vietnam 2009 2nd Quarter GDP Expanded 4.5%

July 2009

The Ministry of Planning and Investment (MPI) last week announced the estimated gross domestic product (GDP) over the past three months had expanded 4.5 per cent, compared with 3.1 per cent in the first quarter, raising economic growth in the first half of this year to 3.9 per cent.Of which, the agriculture, forestry and fishery sector increased 1.25 per cent, industry and construction 3.48 per cent and services 5.5 per cent. All indicators was higher than the previous quarter. “This means the slowdown already bottomed in the first quarter and the economy is now beginning to recover,” said Bui Ha, director of the MPI’s Department of National Economic Generalization. He said evidence of an economic recovery was becoming more obvious, especially with industrial sector data. Since sliding 4.4 per cent in January against the same period last year, the industrial sector has grown in the past five months with a pace of 2.5 per cent in February, 2.3 per cent in March, 5.4 per cent in April, 6.8 per cent in May and 8.2 per cent in June.The services sector also contributed significantly to economic growth over the past months, Ha said.

The MPI estimated that total retail turnover from January to June had increased 20 per cent over the same period last year. “That’s an encouraging result amidst the economic downturn,” the ministry said in a report.Nguyen Minh Phong, head of the Hanoi Institute of Economic and Social Development and Research’s Economic Research Department, said the economic rebound was a result of the government’s stimulus package, which truly started late last March.“Since late March, enterprises and farmers have had easier access to loans from commercial banks, so they started resuming and expanding production and investment plans,” Phong said.

Early this year, the government announced an economic stimulus package worth about $8 billion, including a 4 per cent-interest rate subsidy for commercial loans, tax cuts and increased public investments in infrastructure projects.“In the short term, the government's stimulus package proved its effectiveness in easing enterprises’ thirst for loans and expanding domestic consumption,” said Phong. He said that in the next months, the economy would continue benefiting from the stimulus package.However, Le Dinh An, director of the MPI’s National Centre for Socio-Economic Information and Forecasts, said that the economy would experience challenges in the future, as the global economy was still in a recession. He cited a 10 per cent export reduction in the first half of 2009 against the same period last year. “This global economic recession is not only a financial crisis. It’s also an economic management crisis. There will be a big change in economic management in many countries, and that will have a tremendous impact on Vietnam’s economy,” said An (VN Investment).

2008 Vietnam Tourism Decreased by the World Economic Crisis

November 19, 2008

According to Vietnam authorities and travel centers, due to tour price increases caused by exchange rates, the volume of international visitors for many travel agencies has reduced some 50%. According to some travel agencies, external causes of Vietnam tourism degradation pointing to the world economy crisis. In 2008, Vietnam tour prices have increased some 20% - the highest in many years. Recently French tourist delegation canceled the contract because the tour price increased by 100 USD per person.

The impact of economic degradation also led many international guests and groups to reduce expenditure in Vietnam. Many 5-star hotels become out-of-reach, instead of the 3 star hotels are being "crowning". According to Ms. Dao Viet Nga, representative of Melia hotel, aound this time last year the capacity of rooms in the hotel Melia often reached 90% but now only roughly 80%. More traditional customers said they made reservations with lower-star-level hotels to reduce costs. “Economic Recession in the world makes international visistors to reduce expenses, and difficult situation can last through all of 2009 ", she commented.

According to CB Richard Ellis Vietnam, the 5-star hotels in the third Quarter only reached 59% vacancy rate, a decrease of 19% compared with the same time period last year and the average rental cost 148.5 USD a night. Many high-level hotels have discounts to adapt to conditions of the market. Meanwhile 3 star hotels opted to increase capacity up to 80%.

According to the statistics of the General Department of Tourism, international tourists for 9 months of 2008 was 3.3 million. The market is significantly reduced, especially visitors from Japan, Korea, Europe.

The Minister of Culture and Sports and Tourism, Mr. Hoang Tuan Anh, said that the world economic crisis has clearly impacted on Vietnam tourism, coupled with long-lasting petrol price increases, cost of flights to Vietnam has nearly doubled. As a consequence, the objective of welcoming 4,8-5 million international visitors to Vietnam in 2008 will be difficult to realize.

Vietnam authorities also cited that similar situation has happened in the region. Last year Malaysia attracted 21 million visitors, up 16% from 2006. This year, Malaysia was expected to increase about 20% from last yeas, but the increase for first 9 months of 2008 was only 6%. Singapore last year welcomed 10 million visitors, up 6.7% from 2006, however the first 9 months of this year the increase was only 0.1%.

"In time of difficulties, the strategy of tourism is to attract customers in markets such as near Hong Kong, Taiwan, Japan, South Korea, Thailand ... and the coastal provinces such as GuangDong And GuangXi, Yunnan ", the head of Vietnam tourism Vietnam said.

Vietnam Textile And Garment Targeted
9.5 Billion USD For 2008

November 19, 2008

According to Mr. Le Quoc An, President of Vietnam Textile and Apparel Association, the garment and textile industry is hopefully on target for exporting 9.5 billion USD in 2008 and expected to reach 25 billion USD in 2020. Vietnam Textile and Garment industry has achieved plan the first 6 months of the year 2008, however, enterprises are experiencing difficulties.

"This goal is very ambitious but also very feasible. At present, textile and garment industry of Vietnam is still evaluating the potential for strong development in the next 10-20 years. The speed of development will depend on large and capable enterprises and the country infrastructure. But we believe this could be a reality "- Mr. An said.

At present, the trend of transferring investment and commercial textiles from Central American region, South America, South Africa, Eastern, Western and Southern Europe to the Asian countries is quite remarkable. Vietnam is a country with advantages in attracting investment textiles. However, the competition among Asian countries is also very intense. In addition, the technical barriers on trade are as much a major challenge for Vietnamese textile and apparel.

The Association of Vietnamese Textile and Apparel held a meeting on September 30 of this year and gave out 2008 industry awards to successful enterprises. This was the 5th time the conference was held with the participation of 315 domestic enterprises.

Of the 51 enterprises being awarded in Vietnam textile and garment industry, there were 10 major players in the overall achievement category: General Corporation, Viet Tien Garment, Viet Thang Garment, Coats Phong Phu Garment, Tien Tien Garment, Garment number 10 Co., Nha Be Garment, Scavi, Tho Hoa Garment, Sai Gon 3 Garment, and Thai Tuan Textiles.

According to Mr. An, the first 6 months of 2008, export turnover of garment and textile industry reached 4.2 billion USD, with 44.21% of the plan set out the whole year 2008 is 9.5 billion, and achieved growth of 20%.

However, enterprises are facing many difficulties, such as requesting loans from banks and finding skilled worker. The country has experienced some labor shortage and companies have to deal with strikes as a reality, more often than not.

Vietnam banks are now tightened credit to enterprises making it more difficult to borrow, at the same time interest rates are too high. In addition, prices of raw material have increased, but garment products cannot be increased.

Textile and garment export volume has contributed the largest share of export turnover for the country, about 15% of Vietnam total export value. The sector absorbed 5% of Vietnam labor force, about 1.2 million workers, and has the potential to create 100,000 jobs annually.

To achieve the planned of 2008, the enterprises continue to search and expand into new markets outside the U.S. and Europe. There have been some significant successes. Companies such as Thai Tuan, Thai Thinh has found the Middle East new markets in the Middle East, Eastern Europe, South America, and Africa.

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