Businesses and associations have proposed that the government continue introducing measures to help enterprises boost production and exports as the current difficulties are forecast to last for some time.

Exports and imports fell 11.8 per cent and 15.4 per cent, respectively, year-on-year in the first quarter, according to the Ministry of Industry and Trade (MoIT).

Garments and textiles, footwear, wood, and seafood incurred the largest declines.

The first quarter saw a reduction in exports to all markets. The Americas posted the sharpest year-on-year fall, of 19.4 per cent, followed by Africa with 11.2 per cent, Europe 9.7 per cent, and Asia 7.3 per cent.

The MoIT said falling exports are due to rising inflation, lower purchasing power, price hikes in materials, and increases in labor costs and transport fees.

Many businesses said they face difficulties similar to what they experienced during Covid-19. High inflation has caused people to cut their spending while material prices keep heading upwards. Slow cash flows have also made it problematic for businesses to buy materials, while loan repayments are approaching.

Speaking at a recent conference in Ho Chi Minh City held by the MoIT on tackling difficulties to promote production and exports, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), Nguyen Hoai Nam, said seafood exports fell 27.5 per cent year-on-year in the first quarter.

He proposed that the government introduce a credit package of around VND10 trillion ($422 million) with low interest rates to help businesses secure enough capital to buy materials and maintain production.

Cutting lending interest rates for loans in US dollars would also support exporters, he said.

Vice Chairman of the Vietnam Textile and Apparel Association (VITAS), Tran Nhu Tung, said it is necessary to adopt a credit package with a zero interest rate to help enterprises pay salaries.

The State should also cut corporate income taxes by 2 per cent for businesses that meet green development standards, and also support interest rates for those making a green transition, he said.