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Manufacturing and processing as key impetus for economic growth

VGP – Viet Nam’s index of industrial production (IIP) experienced a year-on-year increase of 3.36% in 2020, mainly buoyed by robust manufacturing and processing, according to the Ministry of Industry and Trade.

01/07/2021 12:35

 

The figure was released at a conference held by the ministry to review industrial production in 2020 and deploy tasks in 2021.

The share of industrial sector, excluding construction, in gross domestic product rose from 27.1% in 2016 to 28.5% in 2019 before falling down to 27.54% this year due to the COVID-19 pandemic.

With construction included, the industrial sector share climbed to 34.5% in 2019 from 32.7% in 2016 before decreasing to 33.7% in 2020.

The sector’s added value increased from VND 810 trillion (US$ 35.27 billion) in 2015 to VND 1,145 trillion (US$ 50 billion) in 2020.

Noticeably, manufacturing and processing took the lead in industrial production and served as key driving for economic growth, in which electronics and garment and textile posted high growth rates and created around 300,000 new job each year.

The ministry said export of processed and high-tech products accounted respectively for 85% and 49.8% in 2020 from 65% and 44.3% in 2016.

Viet Nam could still sustain trade growth momentum in 2020 as evidenced by the total trade volume of over US$500 billion, up from US327.8 billion in 2015.

The nation enjoyed a record trade surplus of nearly US$19.1 billion compared to US$10.87 billion last year and US$1.78 billion in 2016.

Addressing the event, Prime Minister Nguyen Xuan Phuc noted that 2020 was a challenging year for the whole world, but Viet Nam could still manage to fulfill many preset tasks, especially export value was estimated at US$281.5 billion.

International economic integration was further fostered as Viet Nam has established trade ties with more than 230 economies, of these 60 are members of free trade agreements to which Viet Nam is a signatory, Phuc said.

The Government chief affirmed Viet Nam has taken concrete actions to fight transfer pricing and trade fraud while determining to work with the U.S. side to maintain harmonious and sustainable trade ties.

Phuc however pointed out several weaknesses, including huge import volume by economic sectors due to insufficient domestic materials, and low added value of exports.

He urged the ministry to design a system of long-term and consistent policies in order to create a favorable environment for enhancing productivity, quality and competitiveness of the trade and industry sector.

Industries need to be developed in the direction of reducing dependence on unstable factors like crude oil while increasing technological contents of exports, Phuc stressed./.

By Kim Anh