HCM City sees strong growth in first eight months despite slow public investment

HCM City sees strong growth in first eight months despite slow public investment

HCM City, Việt Nam’s economic powerhouse, reported robust gains in industry, services, and foreign investment in the first eight months, but officials warned that sluggish public investment is threatening its 8.5 per cent growth target.

Nguyễn Văn Được, chairman of HCM City’s People’s Committee, said the city has successfully achieved its “dual goals” at a meeting on socio-economic development in the first eight months. — VNA/VNS Photo

Speaking at a meeting on Tuesday, Nguyễn Văn Được, Chairman of the HCM City People’s Committee, said the southern metropolis has maintained momentum since its administrative merger with Bình Dương and Bà Rịa-Vũng Tàu provinces earlier this year, playing a key role as the country’s growth engine.

“The city has seen bright spots, but public investment remains a bottleneck that must be resolved to sustain growth,” he said.

The city’s industrial production index rose 10.2 per cent in August from a year earlier and climbed 6 per cent in the first eight months, with key industries expanding 11 per cent.

Retail sales and consumer service revenue grew 15.6 per cent year-on-year to about VNĐ1.24 quadrillion (US$48.6 billion) during the period, while tourism services surged nearly 39 per cent.

Exports reached US$61.2 billion in the eight months, up 6.35 per cent year-on-year, while imports rose 9 per cent to $65.7 billion.

Foreign direct investment inflows jumped 58 per cent to nearly $6.9 billion, underscoring confidence among overseas investors in Việt Nam’s largest urban economy.

Officials said the city’s recovery has been supported by resilience in both traditional and high-value industries, along with policy measures aimed at boosting consumption and attracting capital.

Public investment lags

Despite these gains, the city disbursed just VNĐ51.5 trillion in public investment as of August 29, equal to 43.3 per cent of the central government’s plan and only 34 per cent of its own expanded allocation.

The slow pace of land clearance has been a major obstacle, with local-level authorities lacking experience and clear coordination mechanisms, according to Được.

“When leadership pushed hard in the second quarter, disbursement rose to 43 per cent. But in the past two months it barely increased by 1 per cent, showing the process is not yet sustainable,” he said, urging departments and districts to identify shortcomings, especially at the grassroots level.

The city has committed to accelerating land clearance, speeding up compensation for major projects, and preparing proposals for priority infrastructure works in the 2026–2030 period to drive growth.

Macro-economic significance

Nguyễn Văn Được, chairman of HCM City’s People’s Committee, said the city has successfully achieved its “dual goals” at a meeting on socio-economic development in the first eight months. — VNA/VNS Photo

Home to over 10 million people, HCM City accounts for about 23 per cent of Việt Nam’s GDP and one-third of national budget revenue. 

The city’s ability to sustain growth and mobilise investment is seen as critical to the country’s overall economic stability, especially at a time of global uncertainty.

Economists note that while strong industrial output and FDI inflows highlight the city’s competitiveness, the underperformance in public investment, a key driver of infrastructure upgrades, could undermine productivity gains and slow its contribution to national growth.

HCM City has been allocated nearly VNĐ151.4 trillion in public funds this year, 127 per cent of the central government’s initial target.

The city aims to accelerate disbursement in the final months of 2025 to support its gross regional domestic product (GRDP) growth target of 8.5 per cent.

Project management boards in HCM City and Bình Dương and Bà Rịa-Vũng Tàu provinces (now part of the enlarged HCM City) said they are stepping up efforts to launch new projects, speed up site clearance, and push contractors to complete construction work on time.

The transport project management board of HCM City, which controls more than VNĐ16.8 trillion in public investment this year, said it has disbursed 55 per cent and pledged to complete 100 per cent by year-end.

City officials stressed that stronger accountability, more decisive leadership, and streamlined coordination between departments will be crucial for accelerating public investment and sustaining the city’s role as Việt Nam’s economic powerhouse. 

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