A view of HCM City’s skyline at night. HCM City has set a target of achieving an economic growth rate of 6.5 per cent in the first quarter. — VNS Photo Bồ Xuân Hiệp

HCM CITY — HCM City has set a target of achieving an economic growth rate of at least 6.5 per cent in the first quarter, the highest level since 2020.

At a meeting late last week, Nguyễn Văn Dũng, deputy chairman of the municipal People’s Committee, said the goal is to set the stage for full-year growth of 7.5-8 per cent.

This growth target is the most optimistic scenario out of the three projected by the HCM City Institute for Development Studies (HIDS).

According to HIDS, if domestic and international conditions improve, risks are well controlled, and there is increased confidence from people and businesses, the Gross Regional Domestic Product (GRDP) in the first quarter could grow by 6.5 per cent.

However, there are two other possibilities, with the baseline growth scenario projected at 6 per cent if the economy continues to recover from the end of 2023.

The unfavourable scenario may occur if the world economy recovers slowly, political conflicts escalate, and complex natural disasters and pandemics impact exports and investments. In that case, GRDP could grow by 5.4 per cent.

“The city’s growth rate scenarios will depend on global developments and the city’s implementation effort,” Dũng said.

According to HIDS, consumer purchasing power in the city continues to rise, and production activities are being maintained, but exports remain challenging. Some manufacturing sectors are at risk due to reduced global demand.

In addition, the city aims to disburse 12 per cent of public investment in the first quarter, according to Dũng.

It aims to disburse 95 per cent of public investment by the end of 2024, with total allocated capital of nearly VNĐ78.8 trillion, including nearly VNĐ3.2 trillion from the central budget.

For tasks throughout the year, the city will speed up public investment, increase domestic consumption, improve regional connectivity, focus on e-commerce development, and attract “green” capital.

Recommendations

To achieve its target growth rate for 2024, experts have proposed several policy recommendations, including diversifying export markets and expanding to potential markets such as Japan, South Korea, and India.

The city should also focus on developing high-tech industries, financial services, and managing and stabilising the real estate market to meet housing demand and support production and business activities.

However, experts have warned that the economic recovery of the country’s largest city will continue to face challenges this year caused by the global financial recession.

The real estate, stock, and bond markets will continue dealing with obstacles this year despite a number of Government measures, they noted.

A number of businesses have been experiencing a lack of export orders due to weak global demand.

The city’s total retail sales of goods and consumer services in January increased by 24.4 per cent year-on-year. Its industrial index increased by 26.9 per cent year-on-year.

The country’s largest economic hub attracted $126 million worth of foreign direct investment (FDI) in January, down 29.8 per cent year-on-year. — VNS