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Saturday, July 13, 2024

Vietnam’s industrial production index up 2.6% this year

In May, Vietnam’s industrial production index (IIP) increased by 2.6% month-on-month and 8.9% year-on-year, driven by robust exports and a favorable comparison to last year’s low base, as reported by the World Bank in its ‘Vietnam Macro Monitoring’ report. Despite improvements in retail sales, consumer demand within the country remained subdued. Both exports and imports saw significant growth, with goods exports rising by 6.5% and imports by 9.5% in May, reversing declines seen in April. Year-on-year, exports and imports surged by 15.8% and 29.9%, respectively, attributed partly to favorable comparisons with 2023.

The World Bank highlighted increased imports of intermediate inputs indicating rising demand from trading partners, which is expected to bolster future exports. Foreign direct investment (FDI) remained robust, with disbursements totaling $8.3 billion, up 7.8% from the previous year, with manufacturing and real estate sectors receiving the most investment.

While headline inflation held steady, core inflation showed a slight moderation, maintaining a consumer price index-based (CPI) inflation rate of 4.4% in May. Economists noted that while external demand was recovering, domestic consumption remained weak. They cautioned that reducing interest rates to stimulate investment amid a strong US dollar could heighten exchange rate pressures.

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