Six-month industrial production decelerates year-on-year

The Index of Industrial Production (IIP) in the first half of 2016 grew by 7.5% from a year earlier, compared to the 9.7% recorded for the same period last year, according to the General Statistics Office. 

Photo for illustration. Photo: Huu Chi

The lower growth rate is attributable to a contraction in the mining industry, which forms the biggest proportion of the industrial sector. The industry saw a 2.2% decrease from January through June, mainly due to a 6.1% decline in crude oil exploitation. That cut the IIP down by 0.5 percentage points.

The IIP growth was also dragged down by a slowdown in consumer demand and political instability in some other countries that resulted in shrunken export markets, the General Statistics Office said.

Meanwhile, the processing and manufacturing industry, with a 10.1% increase, was the biggest contributor (7.1 percentage points) to the six-month industrial production.

Although expanding by 11.7% and 8.1%, electricity production and distribution, along with water supply and waste, and waste water treatment only made up 0.8 and 0.1 percentage points of the total figure, respectively.

However, the prospect in the second half of the year is bright, as the processing and manufacturing industry continued to attract foreign investment this year, with a total of US$8.06 billion poured into 488 new projects and 405 existing ones.

The expansion of processing and manufacturing will also stimulate the development of support industries, thus contributing to overall industrial growth.

(Source: NDO)