HCMC economy to grow 5.87% in Q2, after 0.7% in Q1: mayor

The economic growth of Ho Chi Minh City is forecast to reach 5.87% in the second quarter and 3.55% in the first half of the year, said the city's Chairman Phan Van Mai.

"This is an encouraging result, reflecting great efforts made by the local political system and people," he said at a group discussion on Tuesday as part of the legislature’s ongoing session.

Mai highlighted that the economy of the "national locomotive" had prospered in May, with revenue from wholesale and retail sales, services and tourism expanding significantly. Meanwhile, many summer promotions launched by the city and businesses have helped stimulate tourism demand.

"After its economic indicators fell deeply in the first quarter, Ho Chi Minh City regained its growth momentum,” the leader said.

In Q1, the economic powerhouse’s gross regional domestic product (GRDP) expanded a mere 0.7% year-on-year, the lowest among Vietnam’s five centrally-run cities (including Hanoi, Hai Phong, Danang, and Can Tho). The low figure caused big concern among authorities and the public.

In a meeting on April 16 chaired by Prime Minister Pham Minh Chinh, Minister of Planning and Investment Nguyen Chi Dung noted that HCMC authorities need to proactively spur the city's development rather than relying on MPI guidance.

Fearing the consequence of possible errors, HCMC officials have been reluctant to take decisions in solving growth issues in the economic powerhouse, the MPI minister said while mentioning reasons causing current slow growth.

Dung said the MPI received 584 documents containing questions on administrative and legal issues from HCMC last year. “However, most of the questions were within the city’s power to answer. This is absurd, and shows that we are afraid of responsibility.”

The minister urged city officials to change their attitude to better serve the city’s growth process.

The city’s index of industrial production (IIP) in May was estimated to go up 1.5% from April and 5.5% over the same period in 2022. The five-month index expanded 1.6% year-on-year. Total revenue from retail sales and services was up over 10% from a year earlier, raising the five-month figure to 6.2%.

In the past five months, disbursement of public investment capital in the city was estimated at nearly VND10.2 trillion ($434.1 million), a surge of more than 24% over the same period last year. Of the total, VND8 trillion was disbursed in the last two months.

Director of the HCMC Statistics Office Nguyen Khac Hoang commented that with specific solutions, the city's economy had a positive development. He forecast many high economic indicators in Q2, making the first half results possibly higher than its most optimistic scenario.

However, HCMC's Party chief Nguyen Van Nen noted that amid the complicated and unpredictable world developments, the city should prepare a number of scenarios to adapt to new challenges.