HCMC posts highest H1 growth since Covid-19

Gross regional domestic product (GRDP) of Ho Chi Minh City, the biggest economic engine in Vietnam, expanded 6.46% year-on-year in the first half of this year, the highest since 2020 when Covid-19 struck the country.

The growth is a significant improvement since Covid-19, with growth in the first half of 2022 and 2023 falling just short of 4%, according to the municipal Statistics Office.

However, this year’s pace is still slower than pre-pandemic levels, with the first half of 2019 seeing a 7.61% increase.

Trade and services in the city were vibrant in the past six months, with many programs implemented to stimulate consumption and serve the entertainment needs of people during the summer tourist season. As a result, total retail sales of goods and service revenue in the first six months increased 10% year-on-year.

Industry and construction accounted for 21% of the city’s GRDP, contributing 1.2 percentage points to its overall growth by growing 5.55%. The index of industrial production (IIP) in the six-month period increased 5.6%, the highest in the past three years. Improved production contributed to export turnover reaching $20.6 billion, up 3.1% over the same period.

Services made up 65.6% of the city's economy, followed by taxes less subsidies on products (12.9%) and agriculture-fisheries (0.5%).

Enterprises have shown signs of preparing to invest in production and business. In H1/2024, the city licensed nearly 25,250 businesses with a combined registered capital of VND214,716 billion ($8.4 billion), an increase of 9.6% in licenses and 1% in capital year-on-year.

At credit institutions in the city, total outstanding loans as of June 30 had increased 10.2% year-on-year.

Results of a survey of businesses in the processing and manufacturing industries showed that production and business activities showed signs of improvement in the second quarter compared to the first.

Specifically, 37% of the respondents rated the situation as better; 36.6% as stable and 26.4% as becoming more difficult. For Q3, 37% expected things to get better and 41.2% thought it would be stable.

A report by the municipal Statistics Officie said HCMC should continue perfecting institutions and policies to quickly remove difficulties, obstacles and release resources in the second half of this year.

It said the city should also continue to focus on the disbursement of public investment so that 95% of allocated capital is disbursed this year.