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|The COVID-19 pandemic, as well as FTAs, are the main reason behind the rise of IPP|
Over the first four months, the Index of Industrial Production (IIP) increased by 10 per cent compared to the same period last year. The country's successful control of the COVID-19 pandemic, as well as effective free trade agreements (FTAs) are the main reasons behind this rise, resulting in the vibrant recovery of business and manufacturing activities.
Particularly in April, the IIP was estimated to increase by 1.1 per cent against the previous month and by 24.1 per cent against the same period last year.
Compared to last month, the IIP of the mining industry increased 3.8 per cent; processing and manufacturing increased 0.5 per cent; electricity production and distribution increased 2.6 per cent; water supply, waste, and wastewater management and treatment rose 4.4 per cent.
Data from the General Statistics Office showed that the processing and manufacturing industry increased by 12.7 per cent (the figure was 9.7 per cent in the same period last year), contributing 10.2 percentage points to the general increase.
Meanwhile, the IIP of power generation, transmission, and distribution increased by 6.6 per cent (6.5 per cent in the same period last year), contributing 0.6 percentage points.
Also, water supply, sewerage, waste management and treatment activities increased 7.5 per cent on-year (0.3 per cent last year), contributing 0.1 percentage points to the general growth.
Industrial production maintained its high growth momentum, as of April 1, the number of employees working at industrial enterprises increasing by 1.5 per cent over the last month and by 1.8 per cent over the same period last year.
KB Securities Vietnam JSC (KBSV) stated that the Vietnamese economy in the first quarter continued to show signs of recovery, especially in the industrial and construction sectors (up 6.3 per cent on-year). The manufacturing and processing industry continues to drive GDP growth.
Notably, processing and manufacturing increased by 9.5 per cent on-year, mainly due to the booming export activities of foreign enterprises.
In the first quarter, Vietnam's export turnover reached $77.3 billion, up 22 per cent over the same period last year. This is significantly supported by the recovery of consumer demand at many major trade partners, of which exports to the US, China, and the EU accounted for 32.8, 34.3, and 14.2 per cent of Vietnam's export turnover, respectively.
Export growth remained strong at foreign-invested enterprises since these firms, after relocating production to Vietnam, took advantage of the supply chain and recovery of the global economy.