The Economy of Ho Chi Minh City Shows Promising Signs in Q2/2023
After a deep decline in economic indicators in the first quarter, Ho Chi Minh City has regained its growth momentum
According to the latest forecast from the General Statistics Office, the city’s growth in the second quarter is projected to be 5.87%. With a growth rate of 0.7% recorded in the first quarter, the cumulative growth for the first six months is estimated at 3.55%. This growth is reflected in various sectors:
- The industrial and construction sector is expected to grow by 4.77% in the second quarter.
- The services sector is the highest-performing area, with a projected growth of 7.6%.
The economy of the “nation’s economic locomotive” showed positive signs in May. Wholesale and retail trade, as well as revenue from services and tourism, saw significant increases. Moreover, the city and businesses launched numerous promotional programs during the summer months, stimulating tourism demand.
Previously, a report from the Ho Chi Minh City Statistical Office on May 29 also indicated a positive outlook for industrial production, improved purchasing power, and increased activities in accommodation and tourism. Specifically:
- The Index of Industrial Production (IIP) for May is estimated to increase by 1.5% compared to April and by 5.5% compared to the same period in 2022. In the first five months, the IIP increased by 1.6% compared to last year.
- Total retail sales of goods and revenue from consumer services this month also experienced a growth of over 10% compared to May 2022, with a cumulative increase of 6.2% in the first five months of the year.
- Over the past months, the disbursement of investment capital from the budget has reached nearly 10,200 billion VND, representing a growth of over 24% compared to the same period.
- In particular, in the last two months, Ho Chi Minh City has accelerated significantly with disbursements of over 8000 billion VND.
The Director of the Ho Chi Minh City Statistics Office, Nguyen Khac Hoang, assessed that with specific solutions, the city’s economy has shown optimistic development. He forecasted that by the end of the second quarter, many economic development indicators of the “leading locomotive of the country” will experience high growth, potentially surpassing even the city’s highest projected scenario for the first half of the year.
The report from the Ho Chi Minh City Statistics Office on May 29th provides information on the economic growth indicators of Ho Chi Minh City in the second quarter of 2023
What are the new proposals for further development of Ho Chi Minh City?
According to the Chairman of the city, in the new draft resolution submitted to the National Assembly, Ho Chi Minh City will pilot several specific mechanisms with 27 breakthrough points.
These new specialized mechanisms and policies will help Ho Chi Minh City overcome difficulties, unleash its potential, and mobilize social resources and investment into the city through PPP (Public-Private Partnership), BOT (Build-Operate-Transfer), and BT (Build-Transfer) models. If these mechanisms are implemented effectively, the Chairman believes that Ho Chi Minh City will be able to mobilize hundreds of trillion Vietnamese Dong for development investment in the next five years.
The mechanisms related to science and technology development, and innovation, as well as proposals for decentralization, empowerment, organizational structure, and personnel management mechanisms, will also enable Ho Chi Minh City and Thu Duc City to proactively address issues in a prompt and efficient manner.
The special mechanisms for Ho Chi Minh City as outlined in Resolution 54 and its corresponding adjustments are as follows
In 2017, the National Assembly issued Resolution 54, which introduced various special mechanisms for Ho Chi Minh City with the aim of creating new momentum for the development of the 13-million-people metropolis. However, after 4 years of implementation, the city has not achieved the expected results due to several obstacles. Most of the special policies related to financial management, such as the equitization of state-owned enterprises and revenue from auctioning public assets, have not been effectively implemented.
Phan Van Mai, the Chairman of the Ho Chi Minh City People’s Committee, believes that alongside the special mechanisms, relevant agencies need to research and work towards building a Special Urban Law specifically for the city.
According to Deputy Truong Trong Nghia (representing the Ho Chi Minh City Bar Association), Ho Chi Minh City plays a leading role in various aspects such as the economy, society, healthcare, and education, contributing to Vietnam’s increased position in international competition. Given the requirements of the central government and the city’s role, the proposed mechanisms by the government in this instance are not sufficient.
In the long run, he proposes the development of a Special Urban Law for Ho Chi Minh City, similar to Hanoi’s Capital Law. “This would provide a legal framework that is comprehensive and long-term, so that agencies do not have to develop temporary special mechanism resolutions for the city every few years,” said lawyer Nghia.
During the discussion at the National Assembly on May 30 regarding the draft resolution on the pilot implementation of specific mechanisms and policies for the development of Ho Chi Minh City, Chairman Mai stated that when evaluating Resolution 54, city leaders and agencies had already considered the aforementioned idea. However, preparing the project dossier for the law will take time, so in the meantime, Ho Chi Minh City will develop a new resolution to replace Resolution 54.
After the discussions within the committees and the plenary session, the National Assembly will pass the draft resolution on June 24.
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