A view of HCM City at night. HCM City’s GRDP grew 0.7 per cent in the first quarter, the lowest among the nation’s five centrally-run cities. — VNA/VNS Photo

HCM City’s economic recovery will likely face challenges for the rest of the year, putting in doubt that upcoming quarters will achieve its 2023 growth targets, a city official warned.

Speaking at a meeting on Sunday to review its socio-economic results in the first quarter, Nguyen Van Nen, secretary of the municipal Party Committee, said: “The city’s economy grew only 0.7 per cent in the first quarter, the lowest among the country’s five centrally-run cities and much lower than forecast.”

“The country’s largest city will continue facing problems caused by the escalating global turmoil,” he said.

“The global economic recession and inflation have affected all economic sectors, hindering recovery,” he said.

The real estate, stock and bond markets are all facing obstacles this year amid tightening monetary policy, according to Nen.

A number of enterprises have also reported a lack of export orders due to weak global demand, and the situation will not likely improve until the end of the year.

Dr Vo Tri Thanh, member of the National Financial and Monetary Policy Advisory Council, said Viet Nam’s economy was facing problems related to macro variables such as inflation, bank liquidity, cash flow, exchange rates, interest rates and the real estate market.

Huynh Phuoc Nghia, lecturer at the University of Economics of HCM City, said the city’s 2023 growth target of between 7.5 – 8 per cent would be too high to reach.

“Amid a world economy fraught with complex fluctuations and instability, we cannot expect the city’s economy to recover in 2023,” he noted.

Measures

Nen, secretary of the city's Party Committee, said the city would continue taking measures to support companies and workers.

It would seek ways to supply the economy with capital amid the tight monetary policy. For example, it was implementing a programme to link up lenders and firms to provide the latter with loans, he said.

“One of the most important tasks is speeding up its public spending,” he noted.

Dr. Vo Tri Thanh, member of the National Financial and Monetary Policy Advisory Council, recommended the Government step up measures to address the problems such as support businesses to access capital.

He recommended the country take advantage of China’s tourism opening to attract more international visitors to Viet Nam, especially HCM City.

HCM City early this year lowered its growth target for 2023 to 7.5-8 per cent compared with 9 per cent last year.

The city’s Gross Regional Domestic Product (GRDP) reached VND360 trillion (US$15.38 billion) in the first quarter, up 0.7 per cent year-on-year, according to a report by the city’s Statistics Office.

Its growth was lower than the national average, ranking 56 out of all 63 cities and provinces across the nation, said the report.

The agriculture, forestry and fishery sector went up by 2 per cent and the service sector 2.07 per cent while industry and construction slowed 3.6 per cent.

The city’s total retail sales of consumer goods and services reached nearly VND264 trillion ($11.24 billion) in the first quarter, up 4.7 per cent year-on-year.

The index of industrial production (IIP) dropped 0.9 per cent while the consumer price index (CPI) went up 4.5 per cent.

Foreign direct investment (FDI) in the city reached $497.5 million. Exports were up 5.1 per cent.

Nearly 10,000 enterprises were established with a total registered capital of VND88.9 trillion in the first quarter, up 7 per cent in the number of firms and down 39.1 per cent in value against the same period last year.

Viet Nam’s GDP growth slowed to 3.32 per cent year-on-year in the first quarter, the second lowest growth rate in the last 12 years. — VNS