Vietnam Prime Minister directs action to expand domestic consumption

Prime Minister Pham Minh Chinh has ordered ministries and other agencies to identify and implement solutions to stimulate consumption, support production and develop the domestic market.

In Directive 29 issued Tuesday, he asked for policies to encourage consumption and investment in domestic production sectors in line with market demand.

Domestic enterprises should be supported to participate in the supply chain of foreign-invested enterprises and regional connectivity boosted to reduce costs and facilitate the circulation of goods.

Business associations need to gather information and assess market demand and difficulties faced by enterprises towards proposing solutions to competent agencies.

The PM’s directive urges corporations and other groups to innovate production processes to reduce costs and product prices, while using raw materials and other outputs of domestic enterprises.

Ministries, localities and businesses must increase trade promotion in the domestic market, connect supply and demand, and stimulate consumption of products and goods, the directive says.

It tasks the Ministry of Industry and Trade (MoIT) with taking measures to encourage e-commerce platforms to sell domestically produced goods.

The Ministry of Finance, meanwhile, should control goods imports through e-commerce and propose tax policies to attract investment projects that will produce goods to replace imported products.

It should also conduct activities to promote cross-border e-commerce with countries in the region and major import markets.

Data from the MoIT shows that in the first half of 2024, total retail sales of goods and services in the country increased by only 8.6% compared to the same period last year. If price increases were factored in, the figure would fall to 5.7%. The average growth in the past two years was about 7.2%.

Alongside measures to boost domestic consumption, the PM also wants the MoIT to support businesses in handling issues related to trade defense investigations, origin fraud and technical barriers to increase exports to major markets such as China, the E.U., the U.S., Japan and South Korea.

Agricultural exports to neighboring markets should be promoted by the Ministry of Agriculture and Rural Development, the directive says.

It specifies that the ministry should promptly negotiate with China to reduce animal and plant quarantine periods, clearing the way for more agricultural products to enter this market.

Appropriate policies should be issued by the Ministry of Construction to promote safe and sustainable development of the real estate market, the directive says.

It asks the people's committees of provinces and cities to remove land-related obstacles to attract and expand investment in production and business.

The directive emphasizes that the domestic market is one of the pillars of the national economy. Therefore, stimulating domestic consumption will be key to promoting economic growth.