Panasonic Life Solutions Vietnam Co, Ltd's factory at the Vietnam-Singapore Industrial Park (VSIP) in Binh Duong province. Vietnam's industrial production in the first two months of this year decreases by 6.3% year-on-year. (Photo: VNA)

It is necessary to closely monitor the global economic situation and the fiscal and monetary policies of countries with a large economic scale.

"The Government should regularly review to promptly remove difficulties and obstacles of enterprises for promoting production and business activities, including lack of capital, high input material prices and difficulties in product consumption," Ngoc said.

"Besides that, it needs to have prompt support for several industries being affected by declining demand of the world market such as leather, footwear, textiles and wood."

It needs to monitor labour and job markets closely and then support the enterprises to overcome labour shortages.

State management offices should effectively implement solutions to stimulate trade and service demand and develop tourism programmes.

On the other hand, they should focus on expanding and diversifying export products and markets by effectively exploiting the signed free trade agreements (FTAs) between Vietnam and its partners. On that basis, policies also need to be adjusted to lure further high-quality foreign direct investment.

"The Government should drastically and quickly implement the tasks and investment projects under the programme for socio-economic recovery and development in 2023, including disbursement of public investment capital for key projects to be completed this year or early 2024," Ngoc said.

Disease prevention and control must be strengthened along with plans on preventing drought and saltwater intrusion impacts, as well as natural disasters, rain, floods and landslides to minimise damage to production and people's lives.

Finally, it is necessary to improve the efficiency of State management agencies and tighten administrative discipline in those agencies.

According to the GSO, Vietnam's socio-economic development in February took place in the context that the world economy continued to have many complicated fluctuations.

Global inflation cooled but remained at a high level, while world energy prices are still increasing, and the Russia-Ukraine conflict has many unexpected developments.

Global consumer demand is reducing, causing the number of export orders and turnover to decrease. Many key industries have been affected, especially in localities with large industrial scales, such as Quang Ngai, Vinh Phuc, Binh Duong, and HCM City.

Therefore, the index of industrial production (IIP) in the first two months of this year decreased by 6.3% over the same period last year.

The exports to some key markets recorded a decline, such as the EU (down 4.2%); the Republic of Korea (5.7%); Japan (5.9%); ASEAN (7.9%); and the US (21%).

In that challenging situation, the production and business activities of the enterprises were severely affected by higher input costs but lower orders. Many businesses temporarily suspended operations to find other directions or wait for dissolution procedures.

In the first two months of the year, the number of enterprises suspending business for a definite term was about 39,000 units, an increase of 18.5% over the same period last year. About 9,400 enterprises were waiting for dissolution procedures, an increase of 5.8%.

The difficulties of the world economy also prevented foreign investors from expanding the scale of existing projects in Vietnam. As of the end of February, registered FDI capital reached 535.4 million USD, the lowest from 2019 to 2023 and a reduction of 4.9% year on year.

Core inflation in the first two months of 2023 increased by 5.08%, higher than the general inflation at 4.6%.

"This is a challenge for the State management agencies in issuing monetary policy. It is necessary to have a proactive and flexible monetary policy, ensuring inflation control and supporting economic growth," Ngoc said.

However, the IIP of the number of processing and manufacturing industries in February increased compared to the same period last year, such as the production of beverages, coke, refined petroleum and chemicals, she said.

The total retail sales of goods and services increased by 13% yearly, while Vietnam had a trade surplus of 2.82 billion USD in the first two months.

International visitors to Vietnam were estimated at 1.8 million arrivals, nearly 37 times higher than last year, due to many international tourism programmes when the COVID-19 pandemic is under control./.