The headquarters of HCM City's People's Council and People's Committee in District 1. HCM City has recorded an economic growth rate of 7.33 per cent for the third quarter of the year. — VNS Photo Bồ Xuân Hiệp

HCM CITY — HCM City's economy grew 7.33 per cent in the third quarter of the year, mostly driven by advancements in the industrial and services sectors, according to the General Statistics Office.

This growth follows increases of 6.54 per cent and 6.31 per cent in the first two quarters of the year, respectively. 

The city’s economy grew by 6.85 per cent in the first nine months.

While the agricultural sector experienced a slight decline, the industrial and construction sectors exhibited a robust increase of 6.62 per cent, contributing 22.2 per cent to the city's growth during this period. 

The services sector has also shown considerable growth, increasing by 7.46 per cent, and accounting for nearly 70 per cent of the overall economic expansion. 

Furthermore, product taxes have risen by 4.47 per cent.

In addition, the industrial production index rose by 6.9 per cent year-on-year in the first nine months.

Despite the increase in the industrial production index, construction activities have seen modest growth of 5.29 per cent, primarily due to slow capital disbursement. 

In the services sector, retail sales and consumer service revenue rose by 10.6 per cent, totaling over VNĐ872.3 trillion (US$35 billion). 

The city welcomed over 4 million international visitors in the first nine months, up 12 per cent year-on-year, with tourism revenue reaching VNĐ140 trillion ($5.62 billion). 

The city aims to attract 6 million international visitors and 38 million domestic visitors this year.

Challenges in public spending

Phan Văn Mãi, chairman of the city People’s Committee, however, noted the low disbursement of public investment as a significant challenge. 

As of September 27, VNĐ15.8 trillion, or only 19.9 per cent of the 2024 capital plan, had been disbursed, significantly below the targeted 70 per cent.

Mãi urged departments to devise strategies to accelerate public spending to meet the target of 95 per cent. 

He also called for measures to mitigate tax losses in the e-commerce sector by the end of the month. 

To achieve a year-end growth rate of 7.5 per cent, a substantial increase of 9.5 per cent in the fourth quarter is required, which is extremely challenging for the city, according to Mãi.

The sluggish pace of public investment is also impacting construction and overall economic growth, while the business environment remains stagnant. 

Six out of ten new businesses have closed in the past nine months. 

Most new entrants are small to medium-sized enterprises, while larger firms are exiting the market. 

Credit growth was recorded at 11.3 per cent in the city as of September 30, falling short of the 15 per cent target.

Việt Nam’s GDP in the third quarter of this year increased by 7.4 per cent, despite the adverse effects of Typhoon Yagi, according to the General Statistics Office. — VNS