Important driver for economic growth

Domestic market maintains growth

According to the Ministry of Industry and Trade, recently, domestic consumption and production demand has recovered, along with strong growth in tourism, which has contributed positively to the growth of the trade and service sector since the beginning of the year.

Accordingly, the total retail sales of goods and consumer service revenue at current prices in August 2024 is estimated at VND526.6 trillion, up 7.9% over the same period last year. Of which, the food and foodstuff group increased by 8.2%; household appliances, tools and equipment increased by 6.5%; garment increased by 8.2%; accommodation and catering services increased by 9.7%; and tourism and travel increased by 7.1%.

In the first 8 months of 2024, total retail sales of goods and consumer service revenue increased by 8.5% over the same period last year, of which revenue from accommodation and catering services increased by 14.3%; tourism revenue increased by 26.2%.

Domestic market has maintained growth over the years

“In general, in the first 8 months of 2024, the supply of essential goods was always guaranteed, prices were relatively stable. For pork, due to the impact of the epidemic, the supply decreased in some periods, so prices fluctuated. However, due to the presence of many alternative food products, pork prices did not increase dramatically and are currently stable. Prices of energy fuel group items fluctuated according to world prices,” the Ministry of Industry and Trade pointed out.

In 2024, consumer demand will remain the main contributor to economic growth, alongside the spread of public investment and exports. The domestic market, including trade and services, accounts for a large proportion of GDP growth, and an increase of 10% is a huge number. Moreover, Vietnam's market size of 100 million people is very attractive to domestic and foreign investors.

However, solutions to stimulate domestic consumption need to be stronger. According to Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Policy Research (VEPR), solutions to stimulate domestic consumption in the current context should not simply follow traditional solutions but should be linked to new criteria on green growth and carbon reduction. In addition, there should be a direction to remove difficulties for the real estate market and reform institutions to strengthen investor confidence. Resolving the above challenges will help the economy "overcome headwinds" to restore sustainable growth momentum.

Regarding the retail industry, Mr. Nguyen Anh Duc - Chairman of the Vietnam Retailers Association - noted that businesses need to seize opportunities from the implementation of trade agreements between Vietnam and countries and regions around the world to specifically apply them to their production and business activities.

According to experts, encouraging Vietnamese people to consume Vietnamese goods needs to be more substantial through tax policies, specifically reducing VAT with a long enough roadmap instead of reducing it every 6 months to create momentum for the market. In addition, it is necessary to strongly promote the reduction of corporate income tax and personal income tax to create a strong and synchronous effect.

Ministry of Industry and Trade implements many solutions to promote domestic consumption

The Ministry of Industry and Trade is the state management agency implementing solutions to promote domestic consumption. Accordingly, the Department of Domestic Market - Ministry of Industry and Trade is an organization under the Ministry of Industry and Trade, with the function of advising and assisting the Minister in state management of trade and domestic market (including the market of related goods and commercial services) according to the provisions of law and the assignment of the Minister.

In recent times, the Domestic Market Department has advised the Minister of Industry and Trade to implement many solutions. For example, to promote the domestic market, on August 27, 2024, the Ministry of Industry and Trade advised the Prime Minister to sign and issue Directive No. 29/CT-TTg on stimulating consumption, supporting production, business and developing the domestic market.

Accordingly, the Prime Minister requested Ministers, Heads of ministerial-level agencies, Government agencies, Chairmen of People's Committees of provinces and centrally run cities, industry associations and enterprises to focus on implementing a number of tasks and solutions to promptly remove difficulties for production and business activities, stimulate consumption, promote domestic market development, contribute to promoting growth, maintaining macroeconomic stability, controlling inflation, and ensuring major balances of the economy.

On September 14, the Domestic Market Department also advised the Ministry of Industry and Trade to issue a dispatch on strengthening the supply of essential goods to serve people in localities affected by storm No. 3 (Yagi).

Following that, on September 20, the Domestic Market Department also continued to advise the Ministry of Industry and Trade to issue Official Dispatch No. 7323/CD-BCT on proactively preparing to reserve and supply essential goods to respond to storm No. 4 (Soulik) in 2024. Both of these official dispatches require ensuring the reserve and supply of goods to localities nationwide, so as not to lack essential goods.

From now until the end of the year, the Ministry of Industry and Trade will implement many trade promotion programs, focusing on the National Concentrated Promotion Program held at the end of the year to stimulate consumption.

According to economic experts, the domestic market still has a lot of potential to exploit, prioritizing stimulating domestic consumption is considered an important solution to contribute to GDP growth in 2024 and the coming time. While growth pillars such as exports are facing difficulties, investment needs time to spread, promoting the consumption pillar is the fastest, least expensive solution but has the potential to achieve the highest efficiency.

Source: https://congthuong.vn/thi-truong-trong-nuoc-dong-luc-quan-trong-cho-tang-truong-kinh-te-347394.html