According to the Ministry of Industry and Trade the country’s industrial production sector experienced a 10 percent growth rate in January with the beverage and paper industries registering the highest inventory. The two industries witnessed an increase of 59.5 per cent and 100 per cent, respectively. Other sectors with high inventory are food processing (11 percent), medicine (15 percent), metal production (32 percent) and electronics and computers (38 percent). The reason for the high inventory is the upcoming Tet holiday.
The sectors with reduced inventory are tobacco production (34 percent), leather (8 percent), chemicals (15 percent), and electricity equipment (13 percent).
The ministry also said that thanks to an increased purchasing power prices for Beer, alcohol and beverages rose by 5 to 6 per cent.
EVN (Electricity of Viet Nam) announced that they will not raise power prices during the Tet holiday but there will be an adjustment in March as petrol and electricity prizes are to be adjusted by the market mechanism. The World Bank has warned that electricity prices in Vietnam do not cover production costs. That’s the reason why no one wants to invest in power production. Mr. Hoang Trung Hai said the government will consider the 9.5 percent increase in electricity prices proposed by EVN based on realistic facts. At the moment, the government is missing out on profits from the highly electricity consuming foreign invested sector.
However, electricity prizes in Vietnam are already on the level of those in Malaysia in Indonesia, whereas Vietnam has a significantly lower per capita income.