Many highlights brighten in economic landscape of HCMC

Vegetable processing at Phuoc An Cooperative, Binh Chanh District, HCMC. Photo by Cao Thang/ SGGP

In particular, from May onwards, indexes of industrial production, total retail sales, and total foreign investment capital all grew positively.

Growth recovery

According to the HCMC Statistics Office, the city's economy in the first 9 months of 2023 recorded some bright spots. To be more specific, the index of industrial production (IIP) reported a year-over-year increase of 3.2 percent, with corresponding increases in the first, second, and third quarters being 5 percent, 7.7 percent and 12.9 percent, respectively.

Similarly, total retail sales of goods and service reached US$35.76 billion (VND871,198 billion), a year-over-year increase of 8.6 percent, compared to the growth to 0.9 percent, 4.0 percent and 6.2 percent in the first, second, and third quarters, respectively.

Regarding attracting direct foreign investment, the city has licensed 860 new projects, a growth of 51.7 percent, while the registered capital has reached $406.1 million, an increase of 16.7 percent compared to last year. Another bright spot lies in the city's digital transformation activities. According to the Ministry of Information and Communications, HCMC ranks second in the country in terms of digital transformation index in 2022 when the digital economy occupied 18.66 percent in the city's GRDP.

According to Mr. Nguyen Anh Duc, Chairman of the Vietnam Retailers Association, from July to September 2023, the domestic retail industry has shown positive signs of recovery, reaching a growth rate of over 7 percent compared to last year. Particularly in HCMC, the total retail sales are very impressive in the context of the sharp fall in the world's aggregate demand.

In fact, some positive impacts have been reaped thanks to the demand-stimulating policies, including reducing value added tax by 2 percent, extending tax payment time, reducing land use taxes and fees, boosting large-scale promotion programs, developing tourist visa policy, and reducing lending interest rates.

From another perspective, a representative of Centrail Retail Group said that Vietnam in general and HCMC in particular are considered strategic destinations in the global supply chain, chosen by many foreign businesses. Given their remarkable transformation, Vietnam’s businesses have lifted the country into a major global production center with great supply capacity in terms of diverse products, competitive prices, and improved quality.

Expanding room for development

Customers waiting to pay at Lotte Mart supermarket District 7, HCMC. Photo by Hoang Hung/ SGGP

From the above actual records, the HCMC Development Research Institute has forecast three levels of economic growth for the city in 2023, at 6.08 percent, 6.47 percent and 7.46 percent. In order to achieve the highest estimated rate of 7.46 percent, the political system of HCMC should effectively and synchronously deploy many solutions to expand the room for development.

Accordingly, first, it is advisable to effectively deploy breakthrough policies proposed in Resolution 98/2023, which was passed in the 15th National Assembly, on piloting a number of specific mechanisms and policies for the development of HCMC.

Secondly, the progress of adjusting HCMC's general planning to 2040 with a vision to 2060 needs to be accelerated; at the same time, develop a socio-economic master plan for HCMC for the period 2021-2030, with a vision to 2050. Thirdly, the city should continue to promote public investment disbursement. Fourthly, domestic consumption should be stimulated. Fifthly, More efforts should be made to improve the investment environment to restore business confidence. Sixthly, the city authorities should take social welfare into careful consideration. Seventhly, the green economy and digital transformation should be leverages for the city's economic growth.

Mr. Truong Minh Huy Vu, Deputy Director of the HCMC Institute for Development Research, emphasized that in order to effectively implement the economic development policy, first, the city needs to promote a stronger sense of responsibility and eradicate the "fear of making mistakes" among a section of officials and leaders, promoting stronger decentralization to local levels.

On the other hand, it is necessary to quickly restart the International Financial Center Project to increase internal capital resources for the economy. In the field of attracting foreign investment, authorities should develop and research a new set of criteria and procedures for exclusively selecting strategic investors in core sectors, including the developments of innovation centers, research and development centers, clean energy industry, Can Gio international transit port, and chip-semiconductor production.

Besides, there should be additional support policies consistent with the global minimum tax convention. There also need to be policies to support businesses in green transformation and pilot application in a number of key industries.

Meanwhile, according to Mr. Nguyen Anh Duc, businesses need to proactively capture market information, as well as identify target markets and customers, thereby focusing on researching and developing suitable products for each market, with a systematic production and export plan to meet the requirements of distributors involved in the supply chain.

At the same time, businesses need to urgently develop plans to obey sustainability criteria, which requires green production, transparency and traceability standards throughout the entire value chain, technological innovation, digital application, modern machinery investment, and smart production aiming for green, clean, circular production criteria. In addition, businesses need to focus on building and promoting brand identity, which will provide them with a competitive advantage in the global market.