Retail, manufacturing sectors slow HCM City economy

The slowdown in retail and manufacturing sectors has reduced the speed of Ho Chi Minh City’s economic engine despite significant gains in services, trade, industry and agriculture.

At a regular meeting on the city’s social-cultural-economic, and defence-security situation on May 30, the statistic figures showed mixed signals on the city’s economic development. 

In the first five months, the city’s consumer price index increased only 0.86%, propped up mainly by hikes in transport, electricity, water and building materials to compensate for businesses’ and peoples’ spending on tourism, clothing and entertainment. 

Industry is another sector showing a slowdown with the industrial production index rising only 3.4% in May, a considerable reduction against the level of 8.5% in May, 2015. 

retail, manufacturing sectors slow hcm city economy hinh 0
The city’s main import goods include machinery and materials for production like pharmaceuticals, electronics, spare parts and cars, which highlights the city’s weakness in terms of rate of localisation in industrial products. 

According to the city’s Department of Planning and Investment, the city has exported US$11.89 billion, up 1.2% from last year but has imported US$14.05 billion, an increase of 9.2% against last year. 

At the meeting, Nguyen Thanh Phong, Chairman of the People’s Committee, said it is a concern that local retailers only possess 36% of market share in comparison with 51.5% share of foreign companies. 

He said a strategy to help local companies avoid losing more market share is necessary to prevent adverse impacts on local manufacturing.

He asked the municipal Department of Trade and Industry to soon complete the planning for retail systems, service and trade businesses in the city, and build the city’s brand programmes for each of the city’s key products. 

Phong also asked departments to seek solutions to enhance the competitiveness of enterprises as the country will soon implement numerous free trade agreements.
VNA

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