Topic: difficulties

To help remove difficulties facing petroleum and oil enterprises and ensure supply to the domestic market, the Ministry of Industry and Trade (MoIT) has asked the Ministry of Finance (MoF) to review and adjust costs relating to petroleum and oil imports. The MoIT also proposed that the State Bank of Vietnam (SBV) adopt policies to support these enterprises, such as raising credit limits and offering access to preferential interest rates, etc.

The Ministry of Finance has issued Circular No. 59/2022/TT-BTC stipulating a number of fees and charges. Many types of transportation business fees will be cut by 20-50 per cent. The Ministry of Finance said the reduction of fees and charges aims to help transportation businesses overcome difficulties in the context of rising fuel prices and contribute to cutting business costs. Circular No. 59 takes effect from October to the end of the year.

According to the ACB Securities Company (ACBS), the State Bank of Vietnam (SBV) sold some $21 billion of foreign exchange reserves in the first eight months of this year, or 19 per cent of the total. Reserves now stand at $89 billion, or about 12 weeks’ worth of imports, which is still within a safe margin. ACBS expects it will be difficult for the SBV to maintain low interbank interest rates in the near future, because the US Fed is likely to introduce three more rate hikes from now to the end of the year, putting downwards pressure on the VND/USD exchange rate.

Many exporters are facing difficulties from a decline in orders, resulting in workers being laid off or having their incomes cut. Some have said they are seeking measures to diversify markets, promote digital transformation, and innovate technology. In the closing months of this year, exporters will experience problems from rising non-tariff trade protection barriers in many major markets, unpredictable movements in global commodity prices, and risks from inflation and finance and monetary issues.

At a national conference on removing difficulties during the implementation of the 2 per cent interest rate support program, held on August 26, banks no longer proposed increasing the credit growth limit. Instead, difficulties raised this time mainly related to the identification of beneficiaries and lending conditions.

Vietnam’s agricultural exports to Australia are facing difficulties, as Australia has a labor shortage in many fields, including in the customs sector, while trade growth and Covid-19 remains complex issues. All of these factors have resulted in the slow customs clearance of goods. Vietnam and Australia have set a target of bilateral trade hitting $15 billion this year.

Construction activity and public investment have both slowed during the past six months, creating difficulties for all businesses in the field. According to the Vietnam Association of Construction Contractors (VACC), many enterprises are looking for work in FDI projects because of their fair prices and transparent bidding process.

SSI Research has forecast that revenue growth at textile and garment manufacturing companies in Vietnam will fall over the second half of 2022 and into 2023, due to shortened order times. Yarn, fabric, logistics, and labor costs are also expected to remain high as oil prices increase and workforce competition impacts supply chains.