The approach to Thu Thiem Tunnel in HCM City. The city targets a GDP growth rate of 9.5-10 per cent this year. — VNA/VNS Photo Manh Linh

HCM CITY (Biz Hub) — The country's largest commercial hub has experienced a strong economic recovery in the last two years, HCM City authorities have said.

The city's GDP during the first six months of this year reached nearly VND380 trillion (US$17.8 billion), a growth of 8.2 percent compared with the same period of 2013.

According to HCM City's People's Committee, the city's GDP growth rate was 7.9 percent in 2013 and 8.1 percent in 2012.

A breakdown of sectors for this year shows that services rose 9.6 per cent, while industrial and agricultural production grew by 6.4 per cent and 6 per cent, respectively.

Services accounted for the largest proportion of the city's total economic output at 59.4 per cent.

Le Hoang Quan, chairman of the municipal People's Committee, said the city targeted a GDP growth rate for this year between 9.5 and 10 percent.

For the first half of 2014, export turnover volume was reported at roughly US$14.2 billion, an increase of 5.7 percent and import turnover reached US$12.4 billion, a reduction of 2.2 percent against the same period last year.

As of June 15, the HCM City government had granted investment licences to 11,189 enterprises with total registered capital of more than VND59 trillion (US$2.8 billion), a growth of seven percent in registered capital against the same period last year, according to the head of the city's Department of Planning and Investment, Thai Van Re.

Combining newly invested projects and capital-readjusted projects, HCM City has received US$1.08 billion in FDI since the beginning of 2014, or double the amount received in the same period last year.

During yesterday's meeting, Quan urged better solutions to ensure security and safety, as well as administrative procedures, for foreign investors in the city.

He called on agencies to process licences for investors quickly.

"If enterprises can operate soon, more people can get jobs and this creates a positive impact on the city's macro economy," Quan said.

Challenges ahead

Despite being upbeat about the city's economic outlook, HCM City authorities said the city still needed to achieve GDP growth at between 10.8 and 11.8 per cent for the rest of the year to reach targeted GDP growth of 9.5 to 10 per cent for the entire year.

Economists predicted that the city's economic growth rate in the second half of the year would reach 9.5 per cent, despite economic difficulties.

The growth of export turnover during the first six months of this year was 5.7 per cent.

During the second half of this year, the export turnover of HCM City is expected to be 14.5 per cent, which will help the city reach its export growth target of 10 per cent for the entire year.

The city has also deployed plans to diversify its markets to reduce reliance on raw materials bought from a single country.

In addition, the city is scheduling meetings with general consulates to strengthen the economy, and localities have been urged to take steps to improve the support industry.

Among the chief measures to stabilise the economy for the rest of the year are promotion of rice and vegetable exports; import of materials from ASEAN member countries; and encouragement of innovation in technology and machinery. — VNS