HCM City strives to achieve double-digit economic growth target next year

Positive economic growth

In 2024, Ho Chi Minh City's economy grew by 7.17%, marking a strong recovery after 2023 with a growth rate of only 5.8%. Especially in the third and fourth quarters, the southern city's growth rates reached 7.36% and 7.92%, respectively.

These figures not only reflect that its economy is gradually stabilising after the COVID-19 crisis, but also show a continuous growth trend. This can particularly be seen in the fourth quarter with a growth rate of nearly 8%, this this potentially being the basis for Ho Chi Minh City to set a double-digit economic growth target ahead in 2025.

2024 is also the first year that Ho Chi Minh City has collect more than VND508,000 billion in budget revenue, exceeding the estimate and up by 13.3% compared to the previous year. This growth is strongly supported by key economic sectors such as industry with a growth rate of 7.26%, the export sector up by 8.3%, and tourism accommodation activities with revenue up by 24.7%.

In particular, the service sector, an important driving force of Ho Chi Minh City, has a growth rate of 7.7%, duly accounting for 65.5% of the city's GRDP.

Dr. Tran Quang Thang, director of the Ho Chi Minh City Institute of Economics and Management, highlighted these figures as the result of municipal leaders' constant efforts in management with many support policies with a view towards removing difficulties for businesses, stimulating investment and consumption, whilst promoting trade links.

In 2024, the city made breakthroughs, with growth in each quarter always being better than the previous quarter. Solutions have been increasingly more active to properly solve pending issues, helping the year to achieve strong economic results under current conditions.

Along with confident indicators, there are still numbers that Ho Chi Minh City failed to achieve as planned. That is the growth rate only reached 7.17%, while the target set at the beginning of the year was from 7.5% to 8%. The disbursement plan of more than VND79,000 billion only hit 77%. The number of businesses withdrawing from the market surged by 17.2% with 36,700 firms, leading to many stores facing difficulties and having to close.

Bui Ta Hoang Vu, director of the Department of Industry and Trade of Ho Chi Minh City, said the industry and trade sector also faces limitations and difficulties due to the development of shopping hubs and e-commerce, which also changes consumer behaviour, leading to a fall in sales in some traditional markets.

Street stores are having difficulty returning their premises. The exploitation of land areas for industrial production remains slow, with implementation projects having not kept up with the progress and requirements.

Revolution in administrative procedures

Ho Chi Minh City aims for double-digit economic growth next year, which can be considered an ambitious goal amid the global economy still facing numerous difficulties.

However, economic expert Dr. Tran Du Lich completely believes that this goal has a solid foundation as institutions and infrastructure, the two bottlenecks for the development of the city, are being actively supported by centrally-run agencies. This will help the city's economy to absorb potential capital sources.

The southern city is focusing on resolving suspended planning projects, especially removing them in order to expand the scale of industrial parks that have only been expanded for many years to attract investment. The upcoming projects will be large-scale ones which will have a huge impact on the economy.

One of the key factors expected to contribute to bringing Ho Chi Minh City's growth to double digits is the use of public investment capital, Dr. Linh went on.

Ahead in 2025, the total public investment capital of Ho Chi Minh City is projected to reach VND84,000 billion, plus the public investment capital transferred from 2024, totaling more than VND100,000 billion. This is a huge source of capital, almost equal to the total public investment capital in the entire 2016 to 2020 period with VND110,000 billion.

Disbursement of public investment is a difficulty that Ho Chi Minh City has to face every year when it consistently fails to achieve its set targets. In the context that the political system of the whole country is resolutely implementing Resolution 18 on and streamlining the apparatus, according to Politburo member Nguyen Van Nen, secretary of the Ho Chi Minh City Party Committee, when the number of people decreases, the workload increases and the tasks become heavier, the southern city needs to devise new solutions and new ways of doing things.

The key to achieving next year’s economic growth target of double digits, according to Phan Van Mai, chairman of the Ho Chi Minh City People's Committee, is that the city will prioritise focusing on administrative procedure reform.

To ensure double-digit growth, the city must focus on boosting administrative reform whilst improving administrative efficiency in a bid to overcome difficulties. This year has seen Ho Chi Minh City demonstrate its strong economic recovery with growth of 7.17%, creating a solid foundation for the growth target of 10% in 2025.

However, the challenges that the southern city must face are the ability to disburse public investment capital and changes in consumer behavior that will greatly affect the city's key service industry. Looking at the solutions set out by Ho Chi Minh City in 2025, experts believe that if implemented decisively and thoroughly, the double-digit growth target can be completely achieved.

However, the challenges that Ho Chi Minh City must face are the ability to disburse public investment capital and changes in consumer behaviour which will greatly affect its key service industry.

Looking at the solutions set out by Ho Chi Minh City ahead for 2025, experts believe that if implemented decisively and thoroughly, the double-digit growth target can be completely achievable.