Vietnam’s industrial production rebounds but challenges remain

The index of industrial production (IIP) returned to growth in May after consecutive declines over the previous two months, but enterprises remained in difficulty due to rising input costs.

According to the General Statistics Office, the index in May rose 2.2% from a month earlier and 0.1% compared to the same month last year.

Commerce and services posted strong growth, with the total value of retail sales and consumer services in May soaring by 12.6%.

Vietnam also recorded a trade surplus of 9.8 billion USD in the first five months of the year, compared with 0.24 billion USD seen during the same period last year.

Key exports included phone and phone parts, timber and timber products, seafood, fruit and vegetables, and machinery.

International arrivals to Vietnam reached 4.6 million, a year-on-year rise of 12.6 times, thanks to efforts to promote Vietnamese tourism around the world.

Pledges of foreign direct investment rose 27.8%, demonstrating that Vietnam remained an attractive destination to foreign investors.

Inflation was kept under control, with the consumer price index (CPI) in May rising by 2.43% from a year ago, while the average figure for the January-May period was 3.55%.

However, Vietnamese enterprises continued to face difficulties as the domestic economy was hurt by global economic downturn.

Since the start of the year, the country saw 88,000 enterprises withdraw from the market, up 22.6% from the previous year. The average registered capital of a new enterprise also fell by 24.1%.

The IIP in the five months leading up to May dropped by 2%, due to reduced orders as a result of global economic recession.