Domestic market growth, stable inflation boost competitiveness

08:55 | 06/02/2020 Society

(VEN) - In the World Economic Forum (WEF)’s 2019 Global Competitiveness Index report, Vietnam moved up 10 places and scored an additional 3.5 points compared with 2018. The result was attributed to the country’s efforts to keep the inflation rate stable and the growth of sales in the domestic market. 

domestic market growth stable inflation boost competitiveness
The Vietnamese retail market is of great potential

Double-digit trade, industry growth

The WEF ranked Vietnam as the 67th most competitive economy in the world in 2019, with 61.5 points. Specifically, the country ranked 26th in terms of market size and its ranking ranged from 41st to 93rd in other aspects. Vietnam was also listed among countries with the lowest terrorism threat level and most stable inflation, scoring 100 points in each of the two aspects.

Deputy Minister of Industry and Trade Do Thang Hai affirmed that in recent years, domestic trade continued to play a major role in promoting the sale of products, meeting people’s demand for goods and significantly contributing to the growth of the Vietnamese economy. From 2006-2019, despite limited investment from the state budget, domestic trade contributed an average of more than 10 percent to Vietnam’s gross domestic product (GDP) per year, generating jobs for 12-13 percent of the country’s total workforce.

In 2019, despite the adverse impact of the African swine fever on the commodity market, domestic trade kept growing. Retail sales of goods and revenue from services in November 2019 totaled an estimated VND425.5 trillion, up 0.8 percent compared with October 2019 and 12.6 percent compared with November 2018 - the highest November growth rate in the past six years. In the first 11 months of 2019, total retail sales of goods and revenue from services reached VND4,481.6 trillion, an increase of 11.8 percent compared with the same period of 2018 (the target set by the National Assembly for the industry and trade sector in 2019 was 11.5-12 percent).

Notably, the consumer price index (CPI) was kept stable. In the first 11 months of 2019, the CPI grew 2.57 percent compared with the same period of 2018 - the lowest CPI growth rate in the past three years. Tight coordination between relevant authorities in state price management, especially petroleum, education fees and medical service charges, has helped minimize the impact on the CPI when pork prices increased and curb the inflation rate at below four percent as assigned by the National Assembly.

domestic market growth stable inflation boost competitiveness

Further efforts to build value chains

To enhance the role of domestic trade in the Vietnamese economy, the Ministry of Industry and Trade (MoIT) will take suitable measures to promote the linkage between manufacturers and distributors in order to build value chains of goods along with ensuring serious implementation of regulations on food quality and safety as well as rules of origin. Manufacturers will be encouraged and assisted to increase productivity, improve quality and enhance the competitiveness of Vietnamese products. The MoIT will promote the implementation of its action plan to respond to the Buy Vietnamese Goods campaign by promoting connections between supply and demand. It will continue to coordinate with localities to organize market days and fairs to promote the sale of Vietnamese goods in rural areas.

The MoIT is implementing a project that encourages direct Vietnamese business involvement in foreign distribution networks. It has provided guidelines for businesses to build and develop goods supply chains while at the same time supporting their efforts to improve quality and competitiveness.

According to Tran Duy Dong, Director of the MoIT’s Domestic Market Department, the domestic retail market is of great potential, with nearly 98 million consumers. Moreover, rapid urbanization and consumer income increases are helping boost domestic trade. The Fourth Industrial Revolution or Industry 4.0 has also had a strong impact on production and business activities. Accessing Industry 4.0 technologies is the shortest way to business breakthroughs, helping enhance manufacturing capacity and carve out niches in the domestic market.

Tran Duy Dong, Director of the MoIT’s Domestic Market Department: Along with boosting exports, Vietnam is becoming increasingly interested in expanding its domestic market, considering it a fulcrum for rapid and sustainable economic growth.

Lan Phuong