HCM City posts strongest Q1 growth in five years

HCM City posts strongest Q1 growth in five years

HCM City’s economy expanded by 8.27  per cent in the first quarter of 2026, the highest growth rate for the same period in the past five years, underscoring a sustained recovery and setting a solid foundation for faster expansion in the months ahead.

Container trucks operate at Gemalink International Port, part of the Cái Mép Port system in HCM City. — VNA/VNS Photo

According to the municipal Statistics Office, the services sector remained the main growth driver, rising 8.91 per cent and contributing 56 per cent to the city’s gross regional domestic product (GRDP) growth. Transport and logistics led the sector with a 12.18 per cent increase, highlighting the growing role of logistics in facilitating goods circulation and improving economic efficiency.

Retail and wholesale trade grew 8.85 per cent, reflecting continued expansion in overall demand, though at a slower pace than the broader services sector, suggesting domestic consumption is showing signs of moderation. Financial services rose 8.26 per cent, indicating improved capital absorption, despite credit growth remaining below the national average.

The industry-construction sector grew 7.73 per cent, contributing 32.6 per cent to GRDP growth, but still fell short of expectations. Industrial production rose 7.71 per cent, with manufacturing and processing up 8.46 per cent, continuing to serve as the key engine.

The index of industrial production (IIP) increased 11 per cent, while the four key industrial sectors expanded 13.6 per cent, driven notably by strong growth in chemicals and pharmaceuticals.

However, overall industrial growth was constrained by slower expansion in electricity production and distribution, which rose just 3.1 per cent due to declining thermal power output, and modest gains in mining as crude oil and gas production remained limited.

Investment remained a bright spot, with total social investment estimated at VNĐ141.8 trillion (nearly US$5.4 billion), up 10.7 per cent year-on-year. Public investment disbursement accelerated but reached only about 10.5 per cent of the annual plan.

The business environment stayed positive, with more than 13,600 newly established enterprises, alongside foreign direct investment inflows of nearly $2.9 billion, up 219.7 per cent.

Rising costs and prices, however, continued to pose challenges. The consumer price index increased 3.36 per cent in the first quarter, while industrial producer prices rose due to higher input costs. Service prices, particularly in transport and logistics, surged on the back of elevated energy costs, placing pressure on businesses, especially in manufacturing.

A survey showed that 31.6 per cent of enterprises reported more difficult business conditions compared to the previous quarter.

Surveys indicate a more optimistic outlook for the second quarter, with 43.5 per cent of businesses expecting better conditions, while the share of those anticipating difficulties fell to 22.9 per cent, particularly in sectors such as food processing, textiles, electronics and electrical equipment.

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