On the afternoon of May 3, the Ho Chi Minh City People’s Committee held a regular meeting to assess the socio-economic situation of April and the first four months of the year; set out key tasks and solutions for May 2024.
The meeting also reviewed and approved the contents for submission to the upcoming specialized session of the City People’s Council. Chairman of the Ho Chi Minh City People’s Committee Phan Van Mai and the Vice Chairmen of the City People’s Committee chaired the meeting.
FURTHER STIMULI NEEDED
At the meeting, according to Ms. Le Thi Huynh Mai, Director of the Ho Chi Minh City Department of Planning and Investment, in April, following the growth momentum in the first quarter, all indicators increased compared to the same period last year.
According to Ms. Mai, the industrial production index increased at the highest rate since 2022; total retail sales of goods and consumer services revenue increased; outstanding credit balance in the city increased gradually throughout the month, reaching 9.5%; total state budget revenue increased by 7.5%. In addition, remittances to the city increased by 35.4%.
In April, trade and service activities in the area have seen many positive developments and favourable conditions as the holidays of April 30 and May 1 were extended. Businesses have launched a series of promotions and discounts to stimulate consumer demand. The tourism market is expected to become more vibrant due to the increasing demand for entertainment and recreation during the holidays.
The total retail sales of goods and revenue of consumer services in April 2024 is estimated at VND 93,444 billion, up 1.8% compared to the previous month and 7.8% compared to the same period last year. During the first four months, the total retail sales of goods and consumer services revenue is estimated at VND 366,947 billion, up 12.0% compared to the same period last year.
The consumer price index (CPI) in April increased by 3.48% compared to the same period last year, of which the sub-group of post and telecommunications services decreased by 4.28%, and 10 out of the remaining 11 groups increased, with the highest increase in medicine and medical services (7.76%), education (7.48%), transportation (6.33%), other goods and services (4.60%), housing and construction materials (4.55%).
In April 2024, the index of industrial production (IIP) is estimated to increase by 2.6% compared to the previous month and 5.4% compared to the same period. In the first four months of 2024, the IIP in the city increased by 5.1% compared to the same period last year.
Specifically, for the four key industries, the industrial production index in the first four months of 2024 increased by 6.6% compared to the same period last year. More specifically, the chemical industry increased by 18.6%, the mechanical engineering industry increased by 5.4%, the food processing industry increased by 3.5%, and the electronics industry decreased by 7.8%.
However, in his overall assessment of the city’s economy in the first four months, Mr. Nguyen Khac Hoang, Director of the Ho Chi Minh City Statistics Office, said that the economy is continuing to recover but has not yet had a strong enough boost.
“Industrial production has increased, but if we calculate the average annual increase for all the years since the Covid-19 pandemic, it is only 2.4%, while the national average is 6%. Orders for the industrial production sector are returning, but the order time is short, the price is not increasing, and the profit margin is not creating motivation for businesses,” said Mr. Hoang.
According to Mr. Hoang, the total retail sales in the first four months increased by 14%, but in terms of scale, it is only equivalent to April 2022. Currently, the purchasing power is low and further solutions to stimulate consumer demand are needed.
PUBLIC INVESTMENT DISBURSEMENT RESTARTS
Regarding public investment, data from the Ho Chi Minh City State Treasury shows that as of April 26, the total disbursed capital was VND 5,969 billion, or 7.5% of the allocated capital. While the absolute disbursement figure is three times that of last year, it still falls short of the plan.
According to Mr. Phan Van Mai, Chairman of the Ho Chi Minh City People’s Committee, after the “last push” of the end of 2023 and the efforts in the first quarter of 2024, the city’s public investment disbursement results slowed down in April.
Agreeing with this, the Director of the City’s Department of Planning and Investment said that the disbursement rate of public investment capital is low and has not met the required progress. In addition, the number of businesses temporarily suspending operations is increasing, and the average registered capital of businesses continues to decrease.
Similarly, the budget expenditure for the first four months is also at the lowest level since 2022. In particular, recurrent expenditure decreased by 13.3%, which will affect the growth of the second quarter. Therefore, the Director of the Ho Chi Minh City Statistics Office believes that solutions are needed to increase recurrent expenditure from the public sector.
According to Mr. Phan Van Mai, Ho Chi Minh City has about VND 70,000 billion for this year’s public investment plan, which means that from now until the end of the year, the city will have to disburse VND 10,000 billion each month. To complete this difficult task, Mr. Mai asked Vice Chairman of the Ho Chi Minh City People’s Committee Nguyen Van Dung, who is directly in charge of this work, to give instructions on a weekly, if not daily, basis.
“The City has an action program on public investment, and I request that everyone refer to this program for implementation. We must also maintain the operation of the public investment working groups, the Steering Committee for Key Projects to resolve any difficulties,” Mr. Mai requested.
In addition, the Chairman of the Ho Chi Minh City People’s Committee also requested that investors have a monthly disbursement plan and monitor according to this plan.
In addition, we need to focus on transitional projects. According to Mr. Mai, the projects that have been transferred from 2022 and 2023 have very low disbursement volume in the first four months of this year, and some projects even tendered at the end of 2023 have almost no construction volume up to now. Therefore, we need to accelerate the implementation of transitional projects to create volume, especially for large projects.
As for contractors that lack capacity, Mr. Mai said that they must be dealt with seriously. Moreover, the city will cut funding for projects that can no longer continue and quickly replace them with projects that have already been prepared and are qualified.
In 2024, the City has assigned and allocated the detailed public investment plan capital of VND 79,263,776 billion, including VND 3,168.56 billion from the central budget and VND 75,577.22 billion from the local budget. According to the Ho Chi Minh City State Treasury, as of April 26, the total capital for the city’s public investment plan in 2024 that has been disbursed is VND 5,969,15 billion or 7.5% of the allocated capital.
