The Industrial Production Index (IIP) for July recorded the highest increase of 3.9% compared to June, along with a 3.7% rise compared to the same period in 2022. (Photo: Minh Son/Vietnam+)

The government's financial and monetary policy packages are gradually proving effective in socio-economic life, thereby supporting businesses in maintaining capital sources and stable production and business activities.

Positive signals

Sharing with VietnamPlus, Ms. Phi Thi Huong Nga, Head of the Industrial and Construction Statistics Department, General Statistics Office, Ministry of Planning and Investment, stated that the production and business situation of enterprises in the first seven months of the year, especially industrial manufacturing businesses, has shown positive signals.

This is clearly demonstrated through the Industrial Production Index (IIP), which has continuously increased for three consecutive months: May, June, and July. Among these, the growth rate of the following month is always higher than the growth rate of the previous month. Specifically, the IIP for July recorded the highest increase of 3.9% compared to June, along with a 3.7% rise compared to the same period in 2022.

Ms. Nga cited several key industrial manufacturing sectors that have recorded growth rates of over 10% compared to the same period last year, such as the production of precast metal products, metals, chemicals, tobacco, pharmaceuticals, pharmaceuticals-chemicals-herbs, food processing, textiles, and rubber-plastic products.

The global economic situation facing numerous challenges has impacted the domestic industrial production results in the early months of the year. (Photo: PV/Vietnam+).

However, over the course of seven months, the Industrial Production Index (IIP) still decreased by 0.7% compared to the same period last year. Ms. Nga explained that this decline is mainly due to the challenging global economic situation, which has affected domestic industrial production results in the early months of the year. Specifically, industrial production in the first four months of the year decreased by 2.4% compared to the same period last year.

Innovation for seizing opportunities

During recent times, the government has issued financial and monetary policies to support businesses, such as tax exemptions and reductions, fees reductions (reducing VAT by 2%; reducing 50% of registration fees for domestically assembled-manufactured automobiles; reducing 50% of environmental protection taxes on aviation fuel; reducing 30% of land rent, water surface rent, and extending the deadline for tax payments).

In addition, the State Bank has lowered the operating interest rates four times, ranging from 0.5% to 1.5%. As a result, the lending interest rates have 'cooled down,' while credit balances and access to credit have increased. On the other hand, commercial banks are actively restructuring and extending debts, buying back corporate bonds, and implementing a credit package of 100 trillion VND for social housing loans.

According to Ms. Nga, the government's financial and monetary policy packages are gradually supporting stable production businesses. In particular, the support package that reduces VAT from 10% to 8% has been highly positively evaluated by the business community.

"With resolute and effective governmental management and positive signals from the production sector in recent months, the prospects for businesses to continue maintaining their recovery momentum and performing well in the remaining months of the year are promising," Ms. Nga shared.

Some of Vietnam's key manufacturing sectors are highly reliant on export orders to the United States, Europe, and other regions. (Illustrative image: PV/Vietnam+)

However, on the international front, Mr. Hoang Quang Phong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), emphasized that the impacts of the COVID-19 pandemic are still present. Additionally, issues such as climate change, unusual droughts and floods, strategic competition among major powers, ongoing Russia-Ukraine conflict, inflation pressures, and slow economic recovery in many countries persist.

Meanwhile, several key manufacturing sectors in Vietnam are highly dependent on export orders to the United States, Europe, and other regions.

Furthermore, the shifting of value chains and higher partner demands towards sustainable production and consumption, green and digital economies, and the strong momentum of the Fourth Industrial Revolution are becoming increasingly pronounced. These trends require domestic businesses to innovate in order to solve output challenges and keep pace with global value chain trends and opportunities.

Representing the voice of the business community, the Vice Chairman of VCCI proposed that the government, relevant ministries, local authorities take resolute and effective measures to support and develop enterprises. Additionally, legal frameworks related to investment and business need improvement, and business models based on innovation and creativity need refinement. Specifically, all levels should continue to implement solutions to reduce costs for businesses and enhance their access to resources from state support packages. Particularly timely support measures should be provided to industries that are experiencing strong recovery (such as tourism, services, etc.), while efforts to improve the business environment and enhance national competitiveness should be intensified.

Moreover, Mr. Phong suggested that the business community should assess and identify challenges and opportunities in order to formulate suitable solutions for sustainable development./.