Domestic market plays bigger role in GDP growth

09:04 | 23/01/2019 Economy- Society

(VEN) - In 2018, domestic trade grew 12 percent, two percent higher than the target set by the National Assembly, and the consumer price index (CPI) growth was maintained at a rate below the four percent target. Domestic trade has contributed significantly to Vietnam's economic growth.

domestic market plays bigger role in gdp growth

High growth rate

Total retail sales of goods and revenue from consumer services grew rapidly in recent years, by an average 16.1 percent annually from 2006-2010; 11.38 percent from 2011-2015, and an estimated 10.55 percent from 2016-2018. In the first 11 months of 2018, this index reached nearly VND4,000 trillion, up 11.53 percent compared with the same period in 2017. In 2018, the index was expected to grow 12.1 percent compared with 2017, exceeding the 10 percent target set by the National Assembly.

Tran Duy Dong, Director of the Ministry of Industry and Trade (MoIT)'s Domestic Market Department, affirmed that domestic trade continues contributing significantly to Vietnam's economic growth. In the 2016-2018 period, despite limited investment from the state budget, domestic trade's contribution to Vietnam's gross domestic product (GDP) averaged more than 10 percent annually, generating jobs for 12-13 percent of the country's workforce.

In 2018, to stimulate consumer demand, the MoIT organized various supply-demand connection and trade promotion activities, including fairs and exhibitions. Examples include a conference held in Quang Ngai Province to promote domestic sale and export of watermelons and other agricultural products, and events held to boost litchi sales. These activities helped connect domestic and foreign farm produce distributors and traders with cooperatives and farmers, facilitating the sale of agricultural products.

The MoIT has coordinated with and assisted localities in trade promotion activities to help them expand the markets for agricultural products, such as litchis grown in Bac Giang Province, longans grown in Hung Yen, mangoes grown in An Giang, and dragon fruit grown in Binh Thuan. Distributors in Ho Chi Minh City, such as Satra and Saigon Coop, and foreign invested supermarket chains, such as Metro, BigC and Lotte, have placed many Vietnamese products on their domestic and export market shelves.

Price management

In 2018, price management yielded successful results, especially in petroleum prices that have a major impact on the economy and the CPI.

Petroleum prices were adjusted more than 20 times in 2018, mostly for price stabilization purposes. In October, domestic prices of these products increased just slightly while global prices soared. This was attributed to the MoIT and the Ministry of Finance's decision to use the state's price stabilization fund to subsidize petroleum prices.

Stabilizing pork prices was another successful effort in 2018. In August, pork prices soared due to insufficient supplies and even posted world records. In response, the MoIT allowed domestic companies to import pork and requested domestic pork producers and distributors to keep prices stable. The ministry also disseminated information to prevent pig farmers from spontaneously expanding breeding to avoid oversupply.

Despite sudden increases in April, May and June, the CPI did not exceed four percent by year's end compared with 2017.

Domestic trade not only contributed significantly to Vietnam's economic growth but also helped maintain macroeconomic stability, paving the way for the country to achieve its 2019 targets.

Deputy Prime Minister Vuong Dinh Hue, head of the National Steering Committee for Price Management, noted that

in 2019, ministries, sectors and localities should take the initiative in efforts to curb the inflation rate below four

percent.

Bao Ngoc