Ho Chi Minh City's Q1 growth hits five-year high, but below expectations

HCMC’s gross regional domestic product (GRDP) expanded 7.51% in the first quarter compared to the same period last year, the fastest pace for Q1 since 2020, heard a recent meeting held by the municipal People's Committee.

Le Thi Huynh Mai, director of the municipal Department of Finance, reported that the GRDP reached VND457.62 trillion (over $17.7 billion) during the period. By sector, industry grew by 5.7%, while services increased 8.72%.

Retail sales and consumer service revenue totalled VND316.63 trillion ($12.27 billion), up 14.2% year-on-year. Export turnover stood at $11.7 billion, rising 5.05%, while imports went up 15% to $15.6 billion.

The southern economic hub's tourism earnings surged 26.7% to VND56.66 trillion ($2.2 billion). Besides, the city collected VND151.098 trillion in state budget revenue, equivalent to 29% of the annual target and up 7.72% year-on-year.

Public investment disbursement in Q1 reached VND4.556 trillion ($176.55 milion), or 5.4% of the yearly plan, statistics show.

Nguyen Khac Hoang, director of the HCMC Statistics Office, described the 7.51% growth as an encouraging sign but cautioned that this figure also indicates numerous challenges to the city's efforts to achieve its annual growth target of 8.5-10%.

The rate still fell short of expectations as it should have been at 8,38-8,54% in order to secure growth of 8.5% for this year.

Truong Minh Huy Vu, director of the HCMC Institute for Development Studies, stressed that to reach double-digit growth in 2025, the city must focus on two key areas – business development and scientific-technological innovation.

During Q1, 6,632 new businesses were established with a total registered capital of more than VND42 trillion, marking declines of 39.7% in the number of firms and 55.2% in capital compared to the same period last year. Meanwhile, 16,904 companies temporarily suspended operations, up 10.3% year-on-year.

Further research is needed to determine the causes behind these closures and devise solutions to support business recovery, Vu opined.

Chairman of the municipal People’s Committee Nguyen Van Duoc emphasized that the city faces significant challenges in Q2 and throughout 2025. To achieving the growth target, strong coordination among the political system, businesses, and the public is required.

He stated that gaining double-digit growth is not easy given the need to address multiple critical issues at the same time. He underscored the request for local departments and agencies to proactively resolve bottlenecks in city-level projects to expedite implementation and ensure the efficient disbursement of public investment to support economic momentum.

Chairman Duoc urged officials at all levels, especially agency leaders, to adopt a forward-thinking mindset, act decisively, and demonstrate the highest political commitment. He underscored that all efforts must be geared toward better serving residents and businesses while improving overall living standards.