Vietnam’s Industrial Production Index (IIP) saw significant growth, increasing by 0.7% month-on-month (MoM) and 11.2% year-on-year (YoY) in July 2024, according to the General Statistics Office (GSO). For the first seven months of the year, the IIP rose by 8.
5% YoY, recovering from a 1% decline in the same period last year.
The manufacturing and processing sector experienced a robust YoY increase of 9.5% in July. Notable growth was observed in several localities, with Lai Chau leading at 43%, followed by Phu Tho at 39%, Bac Giang at 28%, Binh Phuoc at 17%, and Thanh Hoa at 15%. Conversely, declines were recorded in Quang Ngai (4.3%), Ha Tinh (2.1%), and Gia Lai (2%).
The GSO also reported a 1% MoM and 3.3% YoY increase in the number of workers in industrial enterprises as of July 1.
Despite these positive figures, Vietnam’s industrial sector faces ongoing challenges. The domestic manufacturing industries’ internal strength remains weak, and longstanding industrial bottlenecks have not been effectively resolved.
Industrial production heavily relies on foreign direct investment (FDI), with domestic industries adding low value and supporting industries remaining underdeveloped.
The recovery of industrial production is not yet comprehensive, with some key manufacturing industries declining compared to last year.
Although some key export products like footwear have shown signs of recovery, they have not returned to their 2022 peaks.
Additionally, geopolitical tensions and rising competition pose risks, coupled with the slow economic recovery of major trading partners.
There remains a threat of disruption to global supply and production chains.
