Ho Chi Minh City's economy regains growth momentum

These positive results are attributable to the Party Committee and the municipal administration's determination to both direct and manage economic development, while working alongside businesses to quickly and effectively solve problems, thus enabling growth in every field.

Nguyen Duc Lenh, deputy director of the State Bank of Vietnam - Ho Chi Minh City Branch, said that during the first two months of the year the credit balance grew positively, showing that the capital absorbability of firms and the economy has improved.

Specifically, the VND509,864 billion credit package through the bank-business connection programme disbursed VND51,754 billion in February to 15,390 customers, accounting for 10.2%.

"There have been positive changes in credit growth. If in January credit dropped to 0.93%, credit grew again in February. In particular, positive changes in the local economy such as import-export, tourism, and service trade are growing well, which has impacted capital needs," Lenh stated.

Sustained efforts to revive economy

In the first quarter of the year, the southern metropolis devised many solutions to revive the economy. The southern city's GRDP in the reviewed period is estimated to have increased by 6.54%, the highest rate compared to the same period from 2020 to present and much higher than the same period in 2023.

Manufacturing and service sectors are growing steadily, especially key industrial groups, while the industrial production index soared by 5.1%, the highest recorded over the past four years.

The city's total retail sales of goods and service revenue increased by 12.2%, whilst the real estate market has shown signs of recovery coupled with the growing confidence of businesses and investors.

Several growth drivers, such as investment, domestic consumption, import-export activities, and tourism have all witnessed drastic changes, of which export turnover soared by 7.5%; tourism activities recovered strongly, visitor numbers and revenue increased sharply; and budget revenue reached 28.7% of the year's estimate and surged 7.61% over the same period.

According to Dr Trương Minh Huy Vu, deputy director of the Institute for Research and Development in HCM City, the growth recorded in the first quarter of the year shows the bright spots in the local economy such as industry, tourism, real estate, and transportation infrastructure, all of which are partly the result of previous proper policies.

Notably, from the end of last year to the beginning of this year, there were important institutional changes, especially at the central level, coming with the approval of the Land Law (amended) and the Housing Law (amended), a move serving to create trust for people and businesses.

“Ho Chi Minh City has been proactive in promoting traditional growth pillars such as public investment, domestic consumption, and exports. It accelerates comprehensive consumer demand stimulation, from service trade activities to tourism, from geographical space to cyberspace, and e-commerce. In addition, green projects and semiconductor projects are starting to form from the private sector," Dr Vu emphasized.

Nguyen Van Nen, Politburo member and secretary of the Ho Chi Minh City Party Committee, assessed that entering 2024, the southern city has drastically performed key and urgent tasks for the cause of socio-economic development, thereby creating positive changes right from the beginning of the year.

In the second quarter and moving forward, to achieve growth goals, especially economic growth, the southern city is required to primarily focus on intensifying growth activities - investment, consumption, and exports. This is along with innovating investment promotion activities with a particular focus on emerging industries and fields, while selectively attracting major groups and businesses to invest in strategic fields and environmentally friendly projects.

More important is to support enterprises, especially in digital transformation and technological innovation, targeting industries with high added value, and engaging in the supply chain, the municipal leader added.

The growth in the first quarter is higher than experts' estimates and will create further growth momentum in the remaining quarters. However, this year’s growth will be difficult later on. Therefore, to fulfil the growth target in 2024, the city still prioritises solutions for domestic consumption, public investment capital, recovery of production and business activities, and improving labor productivity.

In addition, the city will concentrate on improving institutional groups and the legal environment to serve growth in the time ahead.