The central business district of Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Ho Chi Minh City’s economy beat experts’ forecasts with growth of 1.88 percent in the first quarter after shrinking 11.6 and 25 percent in the past two quarters.
“We expect its GDP to decline slightly, and the positive result was unexpected,” Tran Hoang Ngan, director of HCMC’s Institute for Development Studies, told a meeting on Tuesday.
Pointing out that tax revenue was up 9.4% year-on-year and industrial growth was 1%, he said these are signs that the city’s economic stimulus programs have been effective.
Echoing Ngan, director of the city’s planning and investment department, Le Thi Huynh Mai, said the city is recovering faster than expected thanks to a 2.87 percent rise in the service sector.
The service sector accounted for 96.8 percent of the growth, while about 98 percent of factories resumed operations, she added.
Trade rose 3.5% to $11.9 billion despite the impacts of Covid-19 and the conflict between Russia and Ukraine.
City party committee secretary Nguyen Van Nen expressed surprise at the performance but cautioned against complacency saying there are growing challenges.
The country’s economy, due to its high degree of openness, is vulnerable to external shocks such as conflict, risk of Covid re-emergence and China’s zero Covid policy.
China is Vietnam’s second largest market and largest source of goods.
Nen said some key metrics have yet to recover as expected, pointing out that sales of consumer goods and services fell 4.8% and FDI fell 40%.
People’s Committee Chairman Phan Van Mai called on relevant agencies to analyze and resolve major obstacles to keep the city on a growth path.
He warned that soaring commodity costs threaten to cause inflation.