HCMC economy grows 4.57% in 9 months

The services sector contributed the largest nine-month GRDP growth with an increase of 5.67% year-on-year, according to official data.

As two other pillars of the city’s economy, industry-construction also expanded by 2.57% while agriculture, forestry and seafood rose 1.14%.

Nguyen Khac Hoang, head of the Ho Chi Minh City Statistics Office, said that domestic consumption had been the main growth driver in the first nine months as retail turnover during the period reached VND871 trillion ($35.7 billion), up 8.6% year-on-year.

"This is a bright spot that offsets a decline in exports (down 14.2% year-on-year). Domestic consumption rose as the city has been promoting retail with discount programs."

The city saw its Index of Industrial Production rise 3.2% year-on-year in the first nine months, and Hoang said that the third quarter exhibited positive signs as all three months recorded growth of more than 2% each.

Other factors that contributed to the city’s growth were public funds disbursement and tax waivers.

In the period, VND20.52 trillion in public funds were disbursed, a year-on-year doubling of previous figures.

But the amount still accounted for only 30% of the year’s target.

And Hoang said there have also been signs that disbursement might be slowing down.

The city saw 37,200 new businesses established in the first nine months, an increase in volume that still accounted for a decrease in the value of their total capital.

Foreign investment dropped 34.1% to nearly $2 billion.

Although the city had earlier targeted a GRDP growth of at least 7.5% this year, the goal will be difficult to meet because the number would still need to grow by 15% in the last quarter, Hoang said.

Vo Van Hoan, HCMC deputy chairman, said that global difficulties have posed challenges for exporters.

"They will need to strive harder to retain their current markets and find new opportunities at new markets."

City leaders have also said that promoting domestic consumption, tourism and helping businesses access credit could be the main solutions to maintain growth in the last three months of the year.