INDUSTRIAL RECOVERY POWERS ECONOMIC GROWTH

This growth significantly outpaces earlier forecasts and marks a sharp turnaround from the downturn in 2023, when global uncertainties, falling orders and rising input costs hampered industrial performance.

A garment company at an industrial park in Bắc Giang Province. — Photo baochinhphu.vn

HÀ NỘI — Việt Nam’s industrial sector has shown impressive signs of revival, driving growth in trade, consumption and exports to reinforce the foundations for sustainable economic development.

According to the Ministry of Industry and Trade’s report, Index of Industrial Production (IIP) in the second quarter increased by 8.8 per cent compared to the same period in 2024.

This growth significantly outpaces earlier forecasts and marks a sharp turnaround from the downturn in 2023, when global uncertainties, falling orders, and rising input costs hampered industrial performance.

This recovery has focused on the processing and manufacturing sector with a robust growth rate of 10.8 per cent. As a key contributor to the GDP and a major employer, this sector has not only delivered high value-added output but also drove export earnings.

“The recovery also reflects the tireless efforts of the business community and the Government's adaptive and determined economic management,” said Mai Thu Hiền, deputy director of the Department of Planning and Finance under the Ministry of Industry and Trade.

Several industrial sub-sectors have posted growth performances, including motor vehicle manufacturing (34.3 per cent), leather and related products (16.8 per cent), rubber and plastic products (16.1 per cent), garment production (15.7 per cent), transport equipment (14.1 per cent), and food processing (8.8 per cent)

Key products' output followed suit such as automobile (up by 70.3 per cent), television (25.6 per cent), leather footwear (11.5 per cent), and rolled steel (13.8 per cent).

This industrial boom has not been confined to traditional manufacturing hubs like HCM City, Bình Dương, or Bắc Ninh.

Other provinces have emerged as new industrial growth centres, including Phú Thọ (up 46.7 per cent), Nam Định (29.6 per cent), Bắc Giang (28.1 per cent), Bắc Kạn (23.6 per cent), and Hà Nam (22.5 per cent).

This geographic spread of growth helps reduce pressure on urban centres, while fostering inclusive economic development across the country.

Additionally, the industrial revival is closely tied to effective government policies. Stimulus packages, interest rate cuts, streamlined administrative procedures, and increased public investment have improved the business climate, enabling companies to overcome headwinds.

Efforts to ease credit access and enhance logistics infrastructure have reduced costs for businesses and boosted competitiveness. Meanwhile, many firms have accelerated their shift toward green, digital, and automated production models.

The adoption of technologies such as AI, automation, and smart supply chain systems has not only raised productivity but also reduced dependence on imported raw materials. It has also helped Vietnamese companies capitalise on new-generation free trade agreements (FTAs) like the European Union-Việt Nam FTA (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

In the first five months of 2025, total import-export turnover hit US$355.79 billion, a 15.7 per cent increase over the same period last year. Of which, exports of processed industrial goods alone accounted for nearly 85 per cent of this figure. Retail sales of goods and services also rose by 7.9 per cent, pointing to a sustained rebound in domestic demand.

These figures confirmed that market demand is recovering steadily, helping to create a new growth cycle between production, consumption and exports.

However, the industry still faces external risks. Deputy Minister of Industry and Trade Nguyễn Sinh Nhật Tân cautioned about potential disruptions from US trade policy shifts, EU technical and environmental standards and geopolitical instability, including tensions in Ukraine and the Middle East, which may affect global supply chains and input costs.

To tackle these challenges, the Government has been leveraging the advantages of FTAs and implementing a series of strategic resolutions - namely Resolutions 57, 59, 66, and 68 - focusing on industrial development, institutional reform, science and technology advancement, and strengthening the private sector.

The ministry is also collaborating with local authorities to develop eco-industrial parks and encouraging investment in renewable energy and clean technologies.

“Eco-industrial parks will help businesses meet international standards and create long-term added value,” said Tân. “This will enhance the global competitiveness of Việt Nam's industry sector.”

With current momentum, Việt Nam’s ambitious target of 8 per cent GDP growth in 2025 appears within reach. — VNS

Source: VNS