(Photo: VOV)

The industrial production index increased marginally by 2.6% on-year in August, due to the continued expansion of industrial production for domestic consumption and a slight pickup in monthly export performances during the May to August period, the report said. 

Retails grew by 7.6% annually in August, compared to 5.1% on-year in July, but still lower than pre-COVID levels of between 11% to 12 %. While sales of goods increased marginally, sales of services continued to register robust growth, largely due to the expansion of tourism and hospitality services.

Exports and imports of goods continued to contract by 7.3% on-year and 8.1% on-year respectively in August. However, monthly performances of exports and imports have been improving sequentially since May, suggesting that the slump in exports may have bottomed out.

The report highlights Vietnam's FDI performance, which remained steady amid global uncertainties. FDI commitment reached 1.9 billion USD in August, marking a 32% decrease compared to July.

CPI inflation saw an uptick from 2.1% on-year in July to reach 3.0% on-year in August, reversing the preceding six months downtrend, with food and housing continuing to be the two major contributors.

Credit growth rose slightly to 9.4% on-year in August from 9.0% on-year in July, still far below the levels seen over recent years which reflects continually weak investor confidence and private sector investment.

According to WB's economists, recent upward movements in global energy prices warrant close monitoring of CPI inflation. This may also prevent the SBV from loosening monetary policy further as the continuing tight global financial conditions should see flexible FX management to accommodate external conditions.

Moreover, further acceleration of public investment disbursement could support aggregate demand and economic growth in the short run, while focusing on priority green and resilient infrastructure and human capital investments which will help bolster long term economic development.