Purchasing power is declining despite Vietnam retail sales and services revenue rising 9.1 per cent to VND1430 trillion (US$63.4 billion) in the first five months of this year.
If inflation is excluded, the amount marks an increase of 7.8 per cent, according to the General Statistics Office (GSO). However, GSO expert Vu Manh Ha says the growth, with inflation excluded, was lower than the 8.2 per cent growth in the same period last year, showing weaker purchasing power.
Growth was impacted by incidents affecting accommodation, catering and tourism services, as well as the mass fish deaths along Vietnam’s central coast. With the cancellation of beach tours, the spending power of tourism companies in the coastal provinces fell strongly.
Meanwhile, there was a strong 9.5 per cent growth in the purchasing power of goods retailers in the first five months, amounting to VND1920 trillion and accounting for two-thirds of total retail sales and services revenue.
Retailers of rice and foodstuffs saw growth of 13.6 per cent; garment retailers, 10.9 per cent; and home appliance retailers, 9.6 per cent.
Ha says the total retail sales and services revenue next month will increase further because of a high demand for house construction and repairs, and recovering demand for beach tours.
GSO director Nguyen Bich Lam says purchasing power this year is expected to have a lower growth rate than last year because of stability in prices, high supply and stable demand for most essential goods.
Because of consumer fears about environmental pollution and food safety, spending is expected to erode for such services as accommodation, catering, tourism and entertainment, says Lam.