With retail sales growth sluggish for most of this year, Vietnam’s Prime Minister has issued a Directive designed to increase domestic consumption in the lead-up to the Lunar New Year break at the end of January. Though lacking specific details the directive requests policy ideas from the Ministry of Industry and Trade to boost consumption and the simplification of procedures for consumer loans.
Overall, local media coverage suggests broad consensus that there is a domestic consumption problem, relative to past experiences, in the lead up to the Lunar New Year. That said, there does not seem to be much in the way of analysis of the specific aspects of the Prime Minister’s Directive or how it might manifest in a practical sense.
For example, on the issue, Tuoi Tre has spoken with a number of businesses, most of whom have suggested they are anticipating a slower than usual Lunar New Year shopping season. They note that input costs have increased, however, anticipated lower purchasing power is seeing many businesses hold their prices or limit price increases and instead absorb the costs.
Alternatively, Dau Tu Online has contextualised this with comments made at the National Assembly in which concerns were raised that Vietnam was overly dependent on its export activities and that increased domestic consumption would be crucial to sustainable growth. It also makes note of the extension to the 2 percent Value-added Tax cut, though already in place for a number of years this is unlikely to stimulate growth per say but rather see more of the same.
There does not, however, seem to be any suggestion as to where there is bloat in consumer loan procedures that can be cut or what kinds of policies the Ministry of Industry and Trade might pursue.
See also: Retail Industry in Vietnam