Growth stymied by global downturn: HCMC chairman

By Le Tuyet   April 4, 2023 | 03:58 pm PT
Growth stymied by global downturn: HCMC chairman
A building under construction in Ho Chi Minh City. Photo by VnExpress/Thanh Tung
Ho Chi Minh City chairman Phan Van Mai blames stifled growth in the southern hub on low external demand created by a sinking global economy.

When the global economy is healthy, HCMC’s economic growth outlook is positive, said Mai at a forum Tuesday morning.

He was trying to explain why the city had one of the 10th-lowest GRDP growth rates of all localities in Vietnam this quarter. The figure for the economic hub was only 0.7%. As a center of services and industries, the city’s major sectors are facing challenges in the first quarter due to external problems, he said.

Exporters are in trouble as orders have plunged 30-40% year-on-year, Mai said. Workers, now granted less overtime, have seen their incomes drop and therefore families have tightened spending, the chairman said.

Tourism also remains sluggish compared to pre-pandemic levels, even though growth has been recorded, according to the chairman.

Ninety percent of all real estate construction projects in the city are in a seemingly perpetual state of delay as the property market is "frozen," while high loan interest rates are making it difficult for businesses to fund expansion, he added.

Mai said that for the remaining months of the year public spending will have to play a leading role in boosting growth and development in the city.

One of the key tasks for authorities is speeding up site clearance for property projects. This year, 50 projects in 12 districts and Thu Duc City, totaling VND2 trillion in value, have yet to break ground because land had not been cleared.

"If land clearance can be completed within the first six months, later work will be much easier," said Mai.

Other key tasks include defrosting the property sector, and resolving issues in investment, land and tax administrative procedures. Creating jobs to stimulate economic growth should also be prioritized, according to Mai.

"When projects are developed, jobs will be created and confidence will rise."

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