The southern city’s economic growth in the second quarter stood at 6.31%, the lowest compared to centrally-run cities. The city has devised many solutions and showed determination to escape the risk of slowing growth.
During the six-month period, Ho Chi Minh City’s Gross Regional Domestic Product (GRDP) reached more than VND567,000 billion, an increase of 6.46% over the same period, with service trade still being the sector that contributed the most, at 4.34 percentage points, and enjoyed the highest growth rate of 7.26%.
According to Chairman of Ho Chi Minh City People's Committee Phan Van Mai although the city's growth rate over the first half of the year was quite high, the remaining quarters of the year must see the growth rate increase even higher, even up by 8% in the final quarter, thus driving the growth rate of the whole year up between 7.5-8% as expected.
To do so, sectors and localities must focus on removing difficulties and obstacles to further spur economic growth in the remaining months of the year.
Dr. Tran Du Lich said that the southern metropolis’ second quarter growth remained slow compared to the national average. However, in the second quarter, the city strived to promoting the development of the domestic market, tourism, while total revenue of goods and services increased higher than the national average.
In the third quarter, the city will focus on removing difficulties for total social investment, carrying out social housing projects and key programs, and devising solutions for the economy to absorb capital, thereby promoting economic growth.
Numerous solutions for growth needed
Ho Chi Minh City's growth rate is slowing down for many reasons. In particular, the enterprise's production and business operations reduced its profit margin and it is forecast that in the coming time the southern city will continue to be affected by the difficulties of the world situation, with reduced revenue from import and export, and slow disbursement.
In addition, the real estate market has recovered but not strong enough to contribute to the growth of the service industry, while consumer demand is currently low at only half compared to pre-pandemic years.
Nguyen Khac Hoang, head of the Ho Chi Minh City Statistics Department, stated that the city clearly sees the strengths and limitations in growth to work out specific solutions.
Although growth is tending to slow down, there are still positive points, with credit continuing to grow. The city controlled inflation better than the whole nation at 3.26% during the six-month period, while budget revenue soared by 18%, and 33,824 more businesses joined the market.
It essential to determine that domestic consumption is still the main driving force, Hoang emphasized, adding that the city continued to implement price stabilization programs, stimulate consumption, boost tourism development, ensure budget spending according to estimates, promote public investment, and expand new markets in a bid to bolster exports.
The attraction of FDI projects in Ho Chi Minh City has also decreased compared to the same period last year and has been slow in implementation, but exports of enterprises in export processing and industrial zones over the past 6 months still hit US$4.5 billion up by 17% on-year.
In the general socio-economic development situation of Ho Chi Minh City, the City Business Association stressed that businesses have now recovered production and business but still face plenty of difficulties in input materials, increased shipping costs, 34% of inventory, and lack of markets, resulting in week absorption capacity.
The city should research and adjust mechanisms and methods to support businesses participating in international trade promotion activities and other engagement activities to seek and expand markets.
In a nutshell, the "health" of businesses is one of the factors that significantly contributes to Ho Chi Minh City's growth in the remaining months of the year, Hoang stressed.
