Thanks to the momentum from consumption, public investment and tax exemptions and extensions, Ho Chi Minh City's economy has continuously improved over 3 quarters, helping GRDP in the first 9 months increase by 4.57%.
At the meeting on the socio-economic situation on the morning of September 28, the Department of Planning and Investment of Ho Chi Minh City said that the growth in the third quarter continued to increase higher than the previous two quarters, reaching 6.71%. This continuous improvement helped the gross regional domestic product (GRDP) in the first 9 months of the year increase by 4.57% compared to the same period in 2022.
Of which, the agriculture, forestry and fishery sector increased by 1.14% over the same period; industry - construction increased by 2.57%. Service sector alone contributed the most to GRDP growth, increasing by 5.67% over the same period.
According to Mr. Nguyen Khac Hoang, Director of the Ho Chi Minh City Statistics Office, since the beginning of the year, domestic consumption has been the main growth driver of the locality. Specifically, total retail sales of goods and consumer service revenue in the first 9 months of 2023 are estimated at VND871,198 billion, up 8.6% over the same period.
"This is a bright spot to replace the decline in imports and exports (down 14.2% in 9 months). Domestic consumption growth is thanks to the recent implementation of effective shopping stimulus programs and focused promotions," said Mr. Hoang.
Industrial production activities have not been really strong but have been continuously improved. In the first 9 months, the industrial production index (IIP) in the area increased by 3.2% over the same period. According to Mr. Hoang, the encouraging sign is that for 3 consecutive months, the IIP has grown by over 2%. A positive IIP will contribute to maintaining the domestic market, although compared to before the pandemic (2019), the city's production was only 96.17%.
Two other drivers also help Ho Chi Minh City's economy continue to improve, including public investment disbursement and the impact of tax exemption, reduction, and deferral policies for businesses.
Public investment disbursement in the first 9 months reached VND20,523 billion, double that of the same period last year. However, compared to the set target, it only reached more than 30% of the annual plan. Meanwhile, the target for the first 6 months must reach 35% and the whole year must reach 95% of the total allocated capital of VND68,487 billion.
"There are signs that public investment disbursement is slowing down. In the third quarter, 7,000 billion VND was disbursed, only half of the second quarter. This is also a pressure for the fourth quarter," Mr. Hoang commented.
Mr. Nguyen Khac Hoang, Director of the Ho Chi Minh City Statistics Office, spoke at the meeting summarizing the socio-economic situation of Ho Chi Minh City in the first 9 months of the year on the morning of September 28. Photo: Ho Chi Minh City Press Center
From now until the end of the year, Ho Chi Minh City will also face a number of challenges. The number of newly established enterprises in the first 9 months was 37,224, an increase in quantity but a decrease in registered capital. The number of dissolved enterprises decreased but the number of temporarily suspended enterprises increased. Also during this period, foreign investment attraction decreased by 34.1%, reaching nearly 2 billion USD.
According to Mr. Nguyen Khac Hoang, the economy in the second and third quarters improved, but to complete the annual plan, the pressure in the fourth quarter is very large. If we want GRDP 2023 to grow by 7.5%, the last quarter needs to increase by 15%. If we expect growth at 6.5% or 5.5%, we also need results in the last 3 months of the year to be 11% and 9%, respectively.
Mr. Vo Van Hoan, Vice Chairman of the Ho Chi Minh City People's Committee, also assessed that this year's GRDP will be difficult to achieve the target of 7.5-8%. Because if the GRDP in the fourth quarter reaches double digits, it will only help the whole year's growth to be approximately 7%.
According to him, while the local difficulties have not been resolved, the world situation is more or less unfavorable, such as China's slowing growth, the US Federal Reserve's interest rate policy, and weak demand in Europe. Therefore, foreign trade and FDI attraction are expected to continue to decrease in the near future. These factors affect Ho Chi Minh City's import-export, inflation, and consumption.
If it lasts another 1-2 years, he said, it will be even more difficult. "At this time, the city needs to make more efforts to support businesses to maintain existing markets, while also finding new markets, especially the US and Canada, which are very open," said Mr. Hoan.
Overall, Secretary of the Ho Chi Minh City Party Committee Nguyen Van Nen said that the growth results in the past 9 months were still "very encouraging" in the context of the complicated and unpredictable situation in the world and the region; the global economy is unstable. Meanwhile, Ho Chi Minh City has a large trade openness and deep integration, so it is directly affected.
Regarding solutions, Secretary Nguyen Van Nen said that the Standing Committee of the City Party Committee will meet to discuss ways to improve public investment, private investment and foreign investment, as well as remove difficulties and obstacles in mid-October. "Public procurement, thrifty spending, proper spending and careful spending are welcome, but spending on necessary common activities is also a responsibility," he added.
He said it is necessary to continue to stimulate domestic consumption, tourism and support the business community to open up capital flows and resolve land issues. He noted that during the period of transforming the growth model, Ho Chi Minh City will continue to make maximum efforts but not focus on chasing numbers but must have a long-term development vision for the medium and long term.
In order for Ho Chi Minh City's economy to continue to grow in the last months of the year, Mr. Nguyen Khac Hoang, head of the General Statistics Office, said that it is necessary to continue to promote the service sector. "The total domestic demand is currently quite low compared to the potential, normally increasing up to 13% but currently only around 8%, so it is necessary to focus on implementing large-scale, concentrated and long-term promotional programs. Along with that, promote increased public investment disbursement in the fourth quarter to boost growth and create a premise for 2024," Mr. Hoang commented.
Mr. Truong Minh Huy Vu, Deputy Director of the Ho Chi Minh City Institute for Development Studies, suggested that in addition to offline activities, we should promote demand stimulation through online channels and e-commerce platforms. Along with that, public spending and public investment must also accelerate in the fourth quarter to stimulate demand and production.
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