HCM City economy grows at fastest pace in five years

HCM City economy grows at fastest pace in five years

Việt Nam’s largest economic hub, HCM City, is seeing a robust economic recovery, with its Gross Regional Domestic Product (GRDP) rising over 7.5 per cent year-on-year in the first quarter, marking the highest growth rate since 2020.

A view of HCM City skyline seen from the Thủ Thiêm urban area. HCM City’s Gross Regional Domestic Product rose over 7.5 per cent year-on-year in the first quarter, the highest growth rate since 2020. — VNA/VNS Photo

Speaking a meeting on Wednesday, Lê Thị Huỳnh Mai, director of the Department of Finance, said: “The robust performance reflects the city’s efforts to revitalise its economy post-pandemic, attracting investments and boosting consumer confidence.” 

The city’s services sector saw significant growth, expanding by 8.7 per cent during the same period, she added.

In addition, the industrial and construction sectors reported an increase of 5.9 per cent, contributing to the overall economic resurgence.

Total retail sales reached over VNĐ316.6 trillion, an increase of 14.2 per cent, indicating a rise in consumer spending.

Goods exports totaled about US$11.7 billion, a 5.6 per cent increase, while imports rose by 15 per cent to around $15.6 billion. 

The tourism sector generated over VNĐ56.6 trillion in revenue, with the city welcoming 1.64 million international and 8.57 million domestic visitors in the period.

The industrial production index increased by 6.8 per cent, with the processing and manufacturing sectors, including pharmaceuticals and electronics, showing significant growth. 

Foreign direct investment reached over $567 million, up 23.4 per cent, despite challenges faced by domestic enterprises, such as a decline in new business registrations.

State budget revenue for the quarter was estimated at over VNĐ151 trillion, accounting for 29 per cent of the annual estimate. 

Public investment capital for 2025 has been allocated at VNĐ67.4 trillion, with approximately VNĐ3.8 trillion disbursed by the end of March. 

Nguyễn Khắc Hoàng, head of the HCM City Statistics Department, said that the city’s GRDP growth remains commendably higher than that of other economic leaders in the region such as Hà Nội, Cần Thơ, Bình Dương, Đồng Nai and Bà Rịa - Vũng Tàu.

10% growth target

Trương Minh Huy Vũ, director of the HCM City Institute for Development Studies, said while a growth rate of 7.5 per cent is already good, it still falls short of the city’s aspirations for the year.

The Government has set a growth target of 8.5 per cent for HCM City, but the city is aiming even higher with a goal of 10 per cent this year.

Vũ said with the city’s current GRDP standing at VNĐ1.7 quadrillion, achieving significant growth in the short term will require boosting overall demand and focusing on investment.

He stressed the importance of not only continuing to ramp up public investment but also encouraging more private investment.

To do it, the city must continue to create a supportive business environment, improve land availability, and streamline investment procedures, he added.

HCM City’s growth is closely tied to the broader southeastern region, so enhancing regional cooperation is crucial for driving growth, he said.

The city also needs to find ways to connect its eastern and southern growth areas to make the best use of its resources, he noted.

He also proposed HCM City consider setting growth targets for private companies, similar to how the Prime Minister engages major corporations in national projects. 

For the city, this could involve initiatives such social housing, riverside development, and infrastructure projects, he said.

Nguyễn Khắc Hoàng, director of the HCM City Statistical Office, said that the economic landscape in the second half of the year may be tougher than in the first half. 

To meet the city's goals, it will be essential for GRDP to pick up speed in the second quarter to offset any potential downturns in the final two quarters. 

Bizhub