At the regular meeting on socio-economic development in the first seven months of 2024 and the tasks and solutions for the remaining months, held on August 1, Chairman of the Ho Chi Minh City People’s Committee Phan Van Mai emphasized the city’s growth target of at least 7.5% for the whole year.
Looking Further, Longer-Term
To achieve this goal, the Chairman proposed focusing on three major solution groups – growth drivers, including: promoting public investment, stimulating consumption, and boosting exports.
Experts believe that with determination in implementing these large-scale solutions, Ho Chi Minh City can entirely attain the aforementioned growth target, making up for the average growth of the entire 2021-2025 period and creating a leap for the coming years.
Regarding public investment disbursement, Ms. Le Thi Huynh Mai, Director of the Planning and Investment Department, said that Ho Chi Minh City has allocated a detailed plan with a total capital of over VND 79,200 billion for 2024. According to the report of the State Treasury of Ho Chi Minh City, as of July 26, the total planned public investment capital disbursed by the city reached over VND 11,800 billion, accounting for nearly 15% of the allocated capital.
Ho Chi Minh City strives to promote public investment disbursement in the last months of 2024. Photo: HOANG TRIEU
Ms. Mai stated that the amount of capital to be disbursed in 2024, exceeding VND 79,200 billion, is 1.15 times higher than in 2023 and the highest ever. It poses a significant challenge that Ho Chi Minh City has been striving to overcome. According to Ms. Mai, since the beginning of the year, the Planning and Investment Department has advised the City People’s Committee to issue directions and manage public investment. The department has also instructed units and investors to complete the establishment and planning of monthly disbursement to ensure the city’s public investment goals.
With compensation for site clearance accounting for more than VND 22,000 billion and the Land Law 2024 taking effect from August 1, the director of the Planning and Investment Department expects this to contribute to faster disbursement of this capital portion, helping Ho Chi Minh City achieve its public investment disbursement target for 2024.
Agreeing with Ho Chi Minh City’s set goal, Dr. Truong Minh Huy Vu, Director of the Ho Chi Minh City Institute for Development Research, recommended that from now until the end of the year, the city should pay more attention to stimulating consumption and public investment. These policies will help the total demand recover faster and reduce dependence on exports, thereby minimizing the cyclical nature of the domestic economy in the face of global economic fluctuations. This issue becomes even more urgent as Ho Chi Minh City and the whole country must adapt to an increasingly risky and uncertain global economy.
Dr. Truong Minh Huy Vu assessed that the growth of Ho Chi Minh City’s economy in the first half of 2024 was quite good, resulting from the synchronous implementation of measures to stimulate both supply and demand. However, the core issue is that the progress of public investment disbursement has not kept up with the desired pace, despite a significant increase in absolute value. In fact, Ho Chi Minh City’s public investment disbursement in the past two years has been slow in the first two quarters, only sprinting in the last quarter, resulting in unmet targets.
“The city’s growth issue is not just about the annual target number but should be viewed from a longer-term perspective. Although the city’s economic growth has been somewhat subdued in the past two years, this period has also witnessed the development of new infrastructure in the region and the Southeast region, laying the foundation for the economy to transform in the coming years,” said Dr. Truong Minh Huy Vu.
Boosting Consumption Stimulus
A report on Ho Chi Minh City’s economy by the University of Economics Ho Chi Minh City (UEH) recently published showed that the city’s exports would continue to benefit from two large markets, the US and China. Growth in exports will continue to support the recovery of total demand for goods and services in the area.
However, the report also clarified that investment growth in Ho Chi Minh City tends to be lower than the national average. In the context of bad debts showing no signs of decreasing and the lending interest rate level rising, domestic enterprises are likely to face difficulties for the rest of the year. This is a “hot spot” that Ho Chi Minh City needs to focus on monitoring.
To achieve the economic growth target for Ho Chi Minh City, UEH experts proposed that the city should continue to maintain and strengthen promotional programs and discounts to stimulate consumption. Accordingly, it is necessary to study connecting these programs with cultural, sports, and tourism events to increase spillover effects; organizing events focused on the district level to support businesses in promoting their products to local consumers. At the same time, it is essential to enhance connections with neighboring localities to assist Ho Chi Minh City’s businesses in promoting their products.
Dr. Ho Hoang Anh, Head of the Research Group on Ho Chi Minh City Economic Report on Recovery and Challenges at the University of Economics Ho Chi Minh City, stated that, along with exports, consumption in the city continued to recover and showed a slight improvement compared to the national average. If the global economy evolves as expected, coupled with the city’s resolute and effective implementation of synchronous solutions, the growth rate for the whole year could reach 7%-7.5%.
“More importantly, the city needs to focus on accelerating the transformation of the growth model towards high technology and greenization. This is a key factor in helping the city enhance its growth rate in the medium term,” said Dr. Ho Hoang Anh.
Mr. Truong Minh Huy Vu, Director of Ho Chi Minh City Institute for Development Research:
Focus on Implementing Seven Solution Groups
To achieve the growth target of at least 7.5%, the Ho Chi Minh City People’s Committee has drafted a Directive on urgent, key, and regular tasks and solutions for July, August, and the coming months.
Accordingly, Group 1 focuses on public investment disbursement and enhancing capital absorption capacity. Group 2 involves administrative reforms and implementing the authority delegated to Ho Chi Minh City under Resolution 98/2023 of the National Assembly and, more specifically, Decree 84/2024 of the Government. Group 3 is about efficient public spending and boosting consumption and demand stimulation, emphasizing digital transformation in e-commerce – a new driving force.
Group 4 concentrates on import-export activities, which need additional “wings” and enablers to expand domestic and foreign markets. Group 5 concerns environmental protection, promoting projects for social welfare, and expanding land funds for development, focusing on social housing and new industrial park land.
Group 6 is about fostering new growth drivers related to the digital economy and digital transformation, thereby increasing green capital for Ho Chi Minh City, and the program to build Ho Chi Minh City into a major and new service center of the country. Group 7 involves economic diplomacy and international cooperation through the city’s leadership visits; expanding resources to accomplish these goals.
The Ho Chi Minh City Institute for Development Research is currently collecting feedback from departments, sectors, and units to finalize the draft Directive for submission to the Ho Chi Minh City People’s Committee for issuance.
Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA):
Expectations for Public Investment to Create Large Job Opportunities
There are positive signals in the operations of enterprises in the city. Textile and garment enterprises have regained orders and can maintain them until the year-end shopping peak. The agro-product processing and export sector has also grown significantly. Large enterprises and high-tech industries have recovered faster, while small and medium-sized enterprises strive to maintain operations and stable employment.
Since August 1, the amended Land Law, Law on Real Estate Business, and Law on Housing have taken effect, bringing new policies, and Ho Chi Minh City is formulating a draft on adjusted land price tables. Enterprises are expecting the city to promptly implement these policies to address bottlenecks and create additional momentum for their development. In addition, many businesses are also looking forward to the early implementation of the policy on supporting interest rates for priority socio-economic development projects to resolve existing problems.
The Planning and Investment Department of Ho Chi Minh City is collecting feedback from departments and sectors to establish a specialized working group to evaluate which projects fall within the support period. We expect that the city’s focus on promoting public investment disbursement will create extensive job opportunities for enterprises.
P.Anh – T.Phuong recorded
Proposed Planning for Adding 2 New Cities in Ho Chi Minh City
According to Architect Ngô Viết Nam Sơn, Ho Chi Minh City should consider planning two cities within the city in the south and north.
Comprehensive regional connectivity
In addition to building strong physical infrastructure, Ho Chi Minh City needs to strengthen its soft connections with other provinces in the region in order to promote economic development. This includes prioritizing the training of skilled workforce and ensuring access to quality healthcare.
