8-18-08, 9:54 am

Hanoi (VNA) – Soaring prices heavily weighed on the Vietnamese economy and challenged the nation in May and the past five months.

The General Statistics Office reported that the consumer price index rose 3.91 percent in May to hit 15.96 percent for the past five months, a rise of 19.09 percent over the same period last year.

Foods registered the highest rise with 22.19 percent in May, while only the post and telecommunication service was down, by 0.1 percent.

Sharply rising prices of imported industrial material caused a slowdown in production growth rate in provinces heavily reliant upon industry. They included central Da Nang city (15.2 percent), Hanoi (15 percent), northern Quang Ninh province (14.3 percent) and Ho Chi Minh City (13.4 percent).

However, the industrial sector overall still registered a 16.4 percent growth rate in the past five months.

Price hikes caused pain for farmers as prices of fertilisers surged 2.5 times over the same period last year. The absence of a sufficient retail network of fertiliser producers was blamed for the increases.

Animal diseases also made life for farmers difficult. In mid May, bird flu was still affecting breeders in the Mekong delta provinces of Can Tho, Tra Vinh and Long An while blue ear disease continued to blight pig raisers in Lam Dong, Thua-Thien Hue, Ha Tinh, Nghe An, Thanh Hoa, Thai Binh, Thai Nguyen, Nam Dinh and Ninh Binh provinces.

The past five months saw the trade deficit further widen to 14.4 billion USD, which accounted for 61.6 percent of the nation’s export earnings. Of the figure, State-owned enterprises made up 82.4 percent or 11.9 billion VND.

However, such impacts did not leave the economy in total distress over the review period. Exporters brought home an estimated value of 5.15 billion USD in May, thus increasing their earnings in the past five months to 23.4 billion USD, equivalent to 39.5 percent of the yearly target.

Almost all exported items experienced rises, including plastics, up 31.7 percent, electronics, computers and spare parts, up 25.5 percent, and seafood, up 11.7 percent.

The export lines of crude oil, black coal, textiles and apparels, footwear, wooden furniture, seafood, rice and coffee reaped more than 1 billion USD in value.

Economists attributed the export value rise to a commodities price increase in the world market, for example crude oil prices soaring more than 60 percent, black coal price surging 55 percent and rice, up more than 50 percent.

Foreign investment continues to be poured into the country as in May, with 130 foreign invested projects, totaling 7.5 billion USD, receiving licenses. One hundred and thirty two projects already underway were approved to have 600 million USD additional investment.

According to the Ministry of Planning and Investment’s Foreign Investment Department, the total registered investment capital in Vietnam has so far this year hit 14.724 billion USD, a 2.6 time surge from the same time last year.

The department also reported that Canada currently tops the investors’ list. Investors continue to eye services, pouring more than 83 percent of their investment into the field, and putting the reminder of investment into industries, construction, agriculture, fishery and forestry.

Despite soaring prices, the total retail and service turnover reached close to 77 trillion VND in May, an increase of 2 percent from April, bringing the figure in five months to 370 trillion VND, or a 29.5 percent rise compared with the same period last year.

Over the five months, the hospitality industry also bustled with the hotel room occupancy rate reaching 80 percent on average and up to 100 percent in big cities like Ha Noi, Ho Chi Minh City and the coastal city of Nha Trang.

From Vietnam News Agency