In the first half of 2024, the Gross Regional Domestic Product (GRDP) was estimated to grow by 6.46 percent. The industry and construction sector posted a growth rate of 5.5 percent, up 7.26 percent compared to the same period last year.
These are the bright spots in the HCMC’s economic development. However, some experts noted that the city's economic growth rate is showing signs of decline, presenting a significant challenge for the upcoming six months.
Dr Truong Minh Huy Vu, Deputy Director of the HCMC Institute for Development Studies said that although HCMC’s industrial production index has increased, it remains lower than several localities’ figures nationwide. Particularly the manufacturing and processing industry which is a key pillar of the city's economy saw a growth rate that is lower than the overall industry growth rate.
The trends in foreign direct investment (FDI) inflows into provinces and HCMC have increased but the absorption of these funds has remained weak, especially projects in industrial and processing zones or other specific projects.
Vice President of the HCMC Business Association Nguyen Phuoc Hung said that according to a survey, most of businesses are operating steadily at a rate of 57.1 percent, up 6 percent compared to the first quarter of this year. However, the number of businesses experiencing revenue declines has risen to 30.4 percent. The companies’ inventory levels have increased by 34 percent and debts have risen by 42 percent.
He noted that sources of capital are the primary condition for businesses' guarantee. However, prolonged difficulties have affected enterprises and caused cash flow problems for small companies.
The Vice President of the HCMC Business Association proposed the State Bank of Vietnam examine deferral policy for long-term debts until 2024 to relieve the businesses’ pressure of repaying debts. Commercial banks are also urged to support businesses by continuing to extend loan terms and accept collateral for secured business loans including inventory as they have approved previously.
In addition, the city needs to pay attention to administrative procedure reform, and investment in key projects. Firms in the construction sector are expected to increase the capital absorption capacity but it saw a 7.92 percent increase in the first quarter and 4.1 percent in the second quarter.
According to Nguyen Khac Hoang, Director of the Municipal Statistics Office, one of the reasons is the city's low disbursement rate. As of June, the city's disbursement only reached 13.8 percent of the target, greatly affecting growth and foreign investment attracting.
Dr. Tran Du Lich, Chairman of the Advisory Council for the Implementation of Resolution No.98/2023/QH15 of the National Assembly on piloting specific mechanisms and policies for the development of HCMC pointed out that businesses throughout the country, not just in the southern metropolis, have showed weak and slow growth. Therefore, HCMC needs to pay attention to domestic stimulus policies to promote tourism and support enterprises in implementing technology and green transformation.
He suggested HCMC has effective solutions to absorb public and private investment capital as well as focus on urban and housing decoration and embellishment programs. In addition, the implementation of Resolution 98 still faces difficulties, especially the implementation of policies to create motivation, mobilize resources from strategic investors, and invest in projects under the PPP (private-public partnership) mode.
In his conclusion, Chairman of the HCMC People's Committee Phan Van Mai said that there are bright spots in a number of sectors but the capital absorption has remained weak. Therefore, the city must make an effort to stimulate growth which is expected to reach 7 percent and above in the third quarter and 8 percent in the fourth quarter to meet the 2024 target of 7.5 – 8 percent, focus on implementing measures to accelerate the disbursement of public investment capital and become a regular destination to retains tourists.
Regarding ongoing public investment projects facing difficulties in underground space planning, the Department of Planning and Investment and the Department of Construction review and submit reports to the municipal authorities for approval, Vice Chairman of the HCMC People's Committee Bui Xuan Cuong added.
Vice Chairman of the HCMC People's Committee Nguyen Van Dung informed the People's Committee of HCMC and departments will complete major tasks and projects such as International Financial Center, Commodity Trading Platform, Logistics Development Project, and the HCMC tourism development strategy.
