Customers at a supermarket in HCM City. The city faces rising inflation challenges. — VNA/VNS Photo

HCM CITY — Rising inflation poses economic challenges for HCM City, with officials predicting tougher times ahead for Việt Nam’s largest city.

Its Consumer Price Index (CPI) increased by 4.27 per cent in the first five months, impacting residents' budgets, according to a report by the city Statistics Department.

In May, the CPI rose 0.35 per cent from April and 4.5 per cent year-on-year. Of the 11 categories measured, eight saw price hikes, particularly in goods and services, which rose by 1.33 per cent.

Healthcare and medicine costs surged by 17 per cent, while overall CPI growth for the first five months remained at 4.27 per cent.

Meanwhile, transportation costs dropped by 0.4 per cent in the first months.

Speaking at a meeting on Tuesday on the city’s socio-economic development, Nguyễn Khắc Hoàng, head of the city Statistics Department, said the city’s inflation rate exceeds the national average and neighbouring provinces (between 1.5 per cent and 2 per cent).

The city is also expected to face more challenges in the second half of the year due to US countervailing duties affecting local production.

According to a report by the Department of Finance, the city’s total retail sales and consumer service revenue in May reached VNĐ113.364 trillion, up 19 per cent from April.

For the first five months, total revenue is projected at VNĐ544.447 trillion, up 16.8 per cent year-on-year.

The city’s tourism sector generated over VNĐ97.999 trillion in revenue in the first five months, up 28.9 per cent year-on-year.

The city received over 3.123 million international visitors, up 40.2 per cent, while domestic tourism accounted for over 15 million visitors, up 7.7 per cent.

Export turnover grew by 3.4 per cent in May from the previous month, reaching $20.36 billion in the first five months, up 16.1 per cent year-on-year.

Industrial production index (IPI) increased by 5.1 per cent in May and 9.4 per cent year-on-year, with an annual rise of 8.2 per cent.

However, challenges persist as public investment capital disbursement has fallen short of targets, and the number of businesses dissolving or temporarily suspending operations has risen.

As of May 28, VNĐ8.71 trillion had been disbursed, only 10.2 per cent of the public investment target for 2025.

New business registrations totalled 13,894, down 31.4 per cent in quantity and 54 per cent in capital.

However, supplementary registered capital surged by 89.7 per cent year-on-year to VNĐ234.131 trillion.

In the first five months, the total registered and supplementary capital reached VNĐ313.756 trillion, up 5.9 per cent year-on-year.

Despite the challenges, which include 1,534 business dissolutions (up 8.4 per cent) and 20,382 temporary suspensions (up 6.7 per cent), 7,583 businesses resumed operations, maintaining last year’s figures.

HCM City has set a target this year to achieve at least 8 per cent growth. — VNS