(VOVworld) – Vietnam’s economy has experienced a gradual recovery in the first months of this year, especially in industry.  VOV’s To Tuan analyses the effect of the industrial recovery on the economy’s growth.

The industrial production index of both processing and manufacturing industries enjoyed growths in July (Photo: VOV)

The index of industrial production (IIP) rose 7% in July while total industrial output climbed 5.2%. The IIP for most cities and provinces in Vietnam increased in the period- with the northern province of Vinh Phuc recording the highest growth- 24.4%- followed by Da Nang, Ho Chi Minh City, and Hanoi.

These data add to hopes that Vietnam’s industrial production is recovering after a sluggish period. Several sectors including garments and textiles, footwear, electronic components, and mobile phones are enjoying strong production with more stable export market and orders. Pham Thi Phuong Hoa, Director of the Hung Yen Garment Company, said “we have signed more orders compared to the same periods of recent years. This is because some nearby countries are enjoying increasing incomes but their normal sources of goods cannot meet the growing demand. This has created opportunities for Vietnamese garment and textile companies.”

Other industries including motor vehicles, paper, chemicals, and manufacturing have posted growth rates between 10 and 14%. Industrial inventories have been reduced 18%.  Economist Vo Tri Thanh says despite positive changes in the production and consumption of industrial products, more synchronized solutions are needed to maintain the recovery. Thanh added “it’s obvious that there remain many risks. The reduction of risks has created favorable conditions for Vietnam to operate flexibly to support production and business. But it doesn’t mean we will loosen or apply a stimulus package like we did in 2009. The government has sent a clear message to continue stabilizing the national macro economy.”

In the monthly government meeting for July, Prime Minister Nguyen Tan Dung said the government will continue to support inventory to reduction. He urged ministries and agencies to use flexible monetary and financial policies to control market prices toward achieving this year’s socio-economic targets.

Le Quoc Phuong, Deputy Director of the Center for Industrial and Trade Information of the Ministry of Industry and Trade, noted “removing difficulties and supporting markets will be stepped up for the rest of the year. Priority will be given to exports, which are the biggest outlet of the economy. Once it grows, industry will also be boosted.”

 Industrial production is predicted to reach 5.7% growth, which will help achieve the 5.5% goal set for the whole economy.

To Tuan