Industry to lead growth

The industrial sector is expected to continue to contribute significantly to the country’s GDP growth this year after the industry grew by 12 per cent during the last year, according to the Ministry of Industry and Trade.

Growth in the country’s apparel industry was also expected to be positive this year.

The ministry made these projections with respects to the recovery of the industrial sector last year, which helped the country achieve a notable growth rate of 5.32 per cent. The industrial sector currently, accounts for nearly 40 per cent of the country’s GDP.

The ministry estimated that the industrial production of private enterprises this year would increase to 14.5 per cent, while foreign-invested firms would grow by 14.2 per cent. State-owned enterprises are projected to grow by only 4.9 per cent this year.

Insiders anticipated that the processing sector, which includes food, apparel, footwear, electrical products and construction materials, would significantly contribute to the growth of the country’s industrial sector this year.

However, the ministry said that the growth of the industrial sector this year would still depend on consumption demand.

The domestic market this year will not grow as dramatically as in the previous fiscal year because the Government has instituted a number of measures to tighten monetary policies. These new measures, which include an increase in interest rates and the removal of short-term subsidy interest rate loans, are attempting to rein in inflation.

The country’s industrial export output is also expected to significantly increase this year due to the recovery of the world’s markets.

The country’s electronics industry is expected to significantly contribute to the country’s industrial production this year after a new Samsung cell phone factory opened last October. The factory’s exports are expected to earn US$4.5-5 billion this year.

Growth in the country’s apparel industry was also expected to be positive this year, said chairman of the Viet Nam Garment and Apparel Association Le Quoc An. It was highly possible for the industry to increase by 10 per cent this year, An said.

However, the export output of footwear this year is likely to drop after the EU imposed anti-dumping duties on Vietnamese shoes.

In order to make the industrial sector contribute more to the sustainable growth of the country’s GDP, experts have urged the industry to focus on churning out products with high added value and on improving productivity and quality.

According to the Ministry of Planning and Investment, industrial growth currently depends on the increase of investment scales, while its competitiveness relies on cheap labour and inexpensive products.

VietNamNet/Viet Nam News

Tags: Vietnam industry