Industrial production has seen significant progress in the third quarter of this year compared to the two previous quarters. However, there is no room for complacency as industrial production, considered as a key factor to develop the national economy, has declined since 2011. The Vietnam Economic News reports.

At the Government’s regular meeting last September, Prime Minister Nguyen Tan Dung insisted on striving for gross domestic product (GDP) growth of around 5.4 percent and a consumer price index (CPI) of about 7 percent this year.

This was the Government’s key economic targets for 2013, reflecting the efforts by the Party and State in controlling inflation, stabilising the macro economy and striving for reasonable economic growth.

To successfully implement these goals, a breakthrough in industrial production is necessary. Enhanced industrial production is not only an urgent requirement for the economy now but also for next year.

Statistics show that from the beginning of this year, Vietnam's economic growth has been mainly on the basis of the development of the services sector, contributing 2.71 percent to the overall growth rate of 5.14 percent GDP growth rate in the first nine months.

However, only services related to education and hospitality have been developed. So the growth of the service sector is not sustainable and would not be enough to create a breakthrough in the national economy.

The agro-forestry-fishery production continues to build on the comparative advantages of tropical agriculture, but the growth rate of this sector has also tended to decrease. In particular, the sector only registered a 2.39 percent growth in the first nine months of the year, lower than the 2.5 percent increase registered in the same period last year and the 3.74 percent increase in the same period of 2011. In addition, this sector is often heavily affected by natural disasters.

Boosting industrial production is considered as a key factor to develop the national economy as pointed out in the 2011-2020 Socioeconomic Development Strategy, 2011-2015 Socioeconomic Plan and Socioeconomic Planning for 2013.

Unfortunately, industrial production has declined since 2011: the industrial production index rose by 6.8 percent in the first nine months of 2011, but only by 5.4 percent in the same period of 2013; industrial GDP contribution increased 7.43 percent in the first nine months of 2011, but only 5.18 percent in the same period of 2013.

However, a gradual recovery of the industry from the beginning of the year has been seen, with the index of industrial production growing by 4.9 percent in the first quarter, 5.2 percent in the second quarter, and 5.4 percent in the third quarter. These achievements resulted from the development of the processing and manufacturing sector with high manufacturing and consumption of export products.

Industrial production has seen significant progress in the third quarter compared to the two previous quarters as industrial activities in a number of industrial centers such as Ho Chi Minh City and Hanoi were vastly improved.

As capital investment in industrial development is limited, industrial investment should be focused on Ho Chi Minh City, Dong Nai, Ba Ria-Vung Tau, Hanoi, Binh Duong and Bac Ninh. These six localities are making up nearly 70 percent of total industrial production value of the country.

Next are six provinces and provinces ranking second-class in terms of industrial production including Quang Ngai, Quang Ninh, Vinh Phuc, Hai Phong, Hai Duong and Long An which make up a combined nearly 15 percent of the total industrial production value.

To create a breakthrough in industrial production, it is necessary to invest in key points in these industrial centres as well as key industrial products in these areas. That may be the best solution to boost the country’s economy in the final months of this year and create momentum for the first quarter of the next year.-VNA