A key driver of economic growth.

The domestic market maintains growth.

According to the Ministry of Industry and Trade , the recovery of domestic consumption and production demand, along with the strong growth of tourism, has positively contributed to the growth of the trade and service sector from the beginning of the year to date.

Accordingly, total retail sales of goods and consumer service revenue at current prices in August 2024 are estimated at VND 526.6 trillion, an increase of 7.9% compared to the same period last year. Of this, the food and beverage group increased by 8.2%; household goods, tools and equipment increased by 6.5%; clothing increased by 8.2%; accommodation and food services increased by 9.7%; and travel and tourism increased by 7.1%.

Overall, in the first eight months of 2024, total retail sales of goods and consumer service revenue increased by 8.5% compared to the same period last year, of which revenue from accommodation and food services increased by 14.3%; and revenue from travel and tourism increased by 26.2%.

The domestic market has maintained growth over the past several years.

"Overall, in the first eight months of 2024, the supply of essential goods was always ensured, and prices remained relatively stable. However, due to the impact of the disease, the supply of pork decreased in some periods, causing price fluctuations. Nevertheless, thanks to the availability of many alternative food items, pork prices did not increase dramatically and remain stable. Prices of fuel and energy products fluctuated according to world prices," the Ministry of Industry and Trade stated.

In 2024, consumer demand will remain the main contributor to economic growth, alongside the spillover effects of public investment and exports. The domestic market, encompassing trade and services, accounts for a large proportion of GDP growth; a 10% increase would be a significant figure. Furthermore, Vietnam's market size of 100 million people is very attractive to both domestic and foreign investors.

However, stronger measures are needed to stimulate domestic consumption. According to Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Research and Policy (VEPR), measures to stimulate domestic consumption in the current context should not simply follow traditional methods but should be linked to new criteria of green growth and carbon reduction. In addition, there is a need to address difficulties in the real estate market and reform institutions to strengthen investor confidence. Overcoming these challenges will help the economy "weather the headwinds" and restore sustainable growth.

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

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

The Ministry of Industry and Trade is implementing various solutions to boost domestic consumption.

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

Over the past period, the Domestic Market Department has advised the Minister of Industry and Trade on the implementation of 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 consumer demand, supporting production, business and developing the domestic market.

Accordingly, the Prime Minister requested that ministers, heads of ministerial-level agencies, government agencies, chairpersons of provincial and city People's Committees, industry associations, and businesses focus on implementing a number of tasks and solutions to promptly address difficulties in production and business activities, stimulate consumer demand, promote the development of the domestic market, contribute to promoting growth, maintaining macroeconomic stability, controlling inflation, and ensuring the major balances of the economy.

On September 14th, the Domestic Market Department, in consultation with the Ministry of Industry and Trade, also issued a directive on strengthening the supply of essential goods to serve the people in localities affected by Typhoon No. 3 (Yagi).

Following that, on September 20th, the Domestic Market Department continued to advise the Ministry of Industry and Trade to issue Official Dispatch No. 7323/CĐ-BCT on proactively preparing reserves and supplying essential goods to respond to Typhoon No. 4 (Soulik) in 2024. Both of these dispatches requested ensuring the reserve and supply of goods to localities nationwide, preventing shortages of essential goods.

From now until the end of the year, the Ministry of Industry and Trade will implement many trade promotion programs, with the focus being the National Concentrated Promotion Program organized at the end of the year to stimulate consumer demand.

According to economic experts, the domestic market still has much untapped potential, and prioritizing stimulating domestic consumption is considered a crucial solution to contribute to GDP growth in 2024 and beyond. While growth pillars like exports are facing difficulties and investment needs time to spread, boosting consumption is the quickest, least expensive, and most effective solution.

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