Decreasing salaries has lowered consumer demands and badly affected many enterprises and the whole economy in general.
According to the Ministry of Industry and Trade, as of September 1, the inventories of the industries of processing and manufacturing increased by 9.3% compared to the same time last year. This shows Vietnamese firms are still having great difficulties.
Revenue from the retail and services industries in the first nine months increased 12.5% compared to last year, which is lower than normal annual growth rate of 20-24%. In August and September, the CPI for medical care and education sharply increased, and rising fuel and electricity prices has also made people tighten their purses.
Phan Van Thien, head of Bibica Corporation-a confectionery manufacturer, said even though they have been trying their best to keep prices stable while introducing more promotions and discount programmes, consumer demand remains weak.
Also in the same situation, Thu Trang, deputy head of Maximart Supermarket in HCM City, confirmed that people are buying less despite of monthly discount and promotion programmes. Several small supermarkets face bankruptcy.
Currently, Vietnamese firms and labourers are in great difficulty because of declining job slots, low consumption and consumer demands. "Firms are exhausted, we are now far behind regional countries." said Cao Si Kiem, president of Vietnam Association of Small and Medium Enterprises.
Small and medium sized enterprises make up the biggest portion Vietnamese economy and provide 40% of jobs in the country. But since 2010, 250,000 firms have shut down and 69% reported losses.
According to Vietnam Chamber of Commerce and Industry, at least 5 million people became unemployed when the tax debts increased and firms lowered capacity by 30-35%. The number of jobs also decreased because 1.5 million people join the job market each year. Farmers are also impacted because of prices of agriculture products was on the decline from February until July.
It is expected that consumer demand may increase slightly in the last months of the year, however, the revenue from retail industry may only increase 13-14% compared to 2012.
