Hanoi, January 13, 2025 – The Europe Today: Vietnam’s industrial sector saw exceptional growth in 2024, with the industrial production index (IIP) rising by 8.4 percent year-on-year, marking the highest growth in the past four years, according to the General Statistics Office (GSO).
The GSO reported that this growth exceeded the annual target of 7-8 percent. Phí Thị Hương Nga, Head of the GSO’s Industry and Construction Statistics Department, noted that 2024 had been a year of challenges, with unfavourable global and domestic factors. The global economy’s slow recovery, intense trade competition, and escalating geopolitical conflicts created significant hurdles for Vietnam. Domestically, the country focused on stabilizing the macro-economy, controlling inflation, and maintaining growth despite challenges such as natural disasters.
However, despite these difficulties, Vietnam achieved impressive industrial growth, with the highest IIP growth rate in the past four years. Nga attributed this success to effective management by the government, which implemented policies to ease business challenges, particularly through tax reductions. One notable example was Decree 109, which reduced the registration tax for domestically produced and assembled cars by 50 percent, boosting demand and driving growth in the motor vehicle manufacturing sector. The industry’s production index surged by 44 percent in the fourth quarter and 21 percent year-on-year in 2024.
Local authorities also played a key role by reforming administrative procedures, improving infrastructure, and encouraging investment, which further supported industrial development. Investment and trade promotion campaigns were also crucial in fostering growth.
The manufacturing and processing industry posted the highest IIP growth at 9.6 percent, a significant increase from 1.5 percent in 2023. The water supply and electricity production sectors also saw strong growth at 10.7 percent and 9.5 percent, respectively. However, the mining sector faced a decline of 6.5 percent.
Several key industries demonstrated impressive growth in 2024, including rubber and plastic products (up 25 percent), furniture production (up 24 percent), automotive production (up 21 percent), leather and leather-made goods (up 14 percent), coke and refined petroleum products (up 13 percent), and textiles (up 12 percent). On the other hand, the crude oil and natural gas exploitation, coal, machinery maintenance, and beverage production sectors experienced declines.
The IIP across Vietnam’s provinces varied, with 60 out of 63 provinces reporting growth. Phú Thọ, Lai Châu, Bắc Giang, and Thanh Hóa saw notable growth in manufacturing and processing industries, while Khánh Hòa, Trà Vinh, Điện Biên, and Cao Bằng experienced significant growth in electricity production and distribution.
As of December 31, 2024, the inventory index for the processing and manufacturing sector had risen by 10 percent compared to the previous month and by 10.6 percent year-on-year. The average inventory ratio in 2024 was 77.1 percent, down from 88 percent in 2023. Additionally, the number of workers in industrial enterprises increased by 1 percent month-on-month and 3.2 percent year-on-year as of December 1, 2024.
Looking ahead, Nga highlighted that while Vietnam faces global risks such as monetary policy impacts, financial market volatility, and trade protectionism, there are also significant opportunities. These include a stable macro-economy, controlled inflation, stronger foreign direct investment (FDI), and the government’s focus on key national projects. The shift in international supply chains also presents great opportunities for Vietnam.
Nga expressed confidence that Vietnam could achieve a breakthrough in industrial growth in 2025 and beyond by fully leveraging these opportunities, with a focus on digital and green transformations to meet the demands of the increasingly competitive international market.