Vietnam’s Index of Industrial Production (IIP) rose 5.7 per cent year-on-year in the first two months of 2024, figures from the General Statistics Office (GSO) reveal, with the result expected to create momentum for industrial production to grow even further this year.

Some analysts view the result as a major positive amid the ongoing headwinds buffeting global and domestic economies. It also demonstrates the efforts of relevant ministries, agencies, and associations in actively strengthening business links and boosting consumption. Businesses are restructuring and cutting production costs and therefore product prices, helping improve business efficiency and their adaptation to the new circumstances.

Meanwhile, Vietnam’s Purchasing Managers’ Index (PMI) rose to 50.3 points in January, according to an S&P Global survey released on February 1. This shows that manufacturers saw a return to growth due to renewed increases in new orders and output, with signs of recovery in both the domestic and export markets. This is an encouraging starting point for the country’s manufacturing sector.

Amid the positive signs, however, recent reports from various ministries and sectors predict further challenges for Vietnam’s industrial sector in 2024. The global economy is expected to struggle with low growth and rising inflation, while tightened monetary policies over the past two years are believed to still have some lingering effect. Uncertainty over and instability in the global economy is at its highest level for many years, to the detriment of Vietnam’s macro-economic stability and growth outlook as it continues to seek a higher level of economic openness.

In order to meet the 2024 growth targets, the government has assigned tasks to each ministry and each sector with clear goals, focusing on accelerating industrial production, exports, and the disbursement of public investment capital, boosting domestic and foreign investment attraction, and stabilizing the macro-economy.

Notably, Government Resolution No. 01/NQ-CP dated January 5, 2024, on the main tasks and solutions to implement the socio-economic development plan and State budget estimates in 2024, containing 12 groups of tasks and solutions and 168 specific tasks, and Government Resolution No. 02/NQ-CP on the primary tasks and solutions to improve the investment and business environment and enhance national competitiveness in 2024, both serve as a foundation to promote economic growth with a firm eye on rapid and sustainable development.

With a role of managing the industry sector, the Ministry of Industry and Trade will focus on key solutions such as effectively implementing business support policies approved by the government, to tackle the difficulties and obstacles in production and trade. Specifically, it will coordinate with relevant agencies and localities to promote and put into operation industrial production projects serving both exports and domestic consumption.

In order to regain high levels of growth, economic analysts believe that Vietnam’s industrial production requires stronger and more comprehensive growth drivers, and have called for more support from the government, ministries, sectors, localities, and the banking system to accelerate industrial production, particularly the output of products, through boosting domestic consumption and enhancing trade promotions to expand orders and export markets.