The HCM City economy has taken a hit from COVID-19. — Photo nld.com.vn

HCM City’s economic growth slowed down to 1.39 per cent in 2020 due to the effects of the COVID-19 outbreak.

Huynh Van Hung, head of the city’s Statistics Office, said further the rate was less than half the country's GDP growth rate of 2.91 per cent, the first time this has happened in decades.

In 2019 the city had grown at 7.83 per cent.

But considering its economy depends a great deal on services and tourism, the growth is still satisfactory, Hung said.

Agriculture, forestry and aquaculture grew by 2.06 per cent, services by 2.17 per cent, and industry and construction by 0.43 per cent.

Services grew at the lowest rate in the last 10 years.

Accommodation and dining suffered greatly, falling by 33.94, while real estate sales declined by 4.37 per cent.

Retail sales fell by 1.3 per cent.

Due to the various tax breaks the city offered to mitigate the problems caused by the pandemic to the economy, its revenues declined by 14.2 per cent, Hung said.

It also had to cut public spending by 10 per cent though demand for investment in infrastructure remained high, he said.

There was a trend of large businesses moving from HCM City to nearby provinces such as Long An, Binh Duong and Dong Nai, which are competing with it to attract investment, he said.

Its economy would face many more challenges as global economic integration deepens, he warned.

Phan Thi Thang, deputy chairwoman of the city, said the city has accomplished 16 out of 20 socio-economic targets.

It has helped businesses survive the pandemic, and administrative reforms continued through the year, with the use of information technology in administration increased, she said.

In 2021 the city would continue to have supportive policies with regard to tax and social and unemployment insurance to help sustain businesses and create jobs, she promised.

It would focus on attracting foreign investment, improve its investment climate and encourage new businesses in the fields of electronics, technology, finance, education, and medicine, she said.

It needs to build low-cost and social housing, promote a variety of tourism products and work with partner countries to resume economic activities and tourism, she added. — VNS