Dr Trần Hoàng Ngân, director of the HCM City Development Research Institute, speaks at a seminar yesterday in HCM City. Photo courtesy of the HCM City Media Centre

HCM CITY — HCM City authorities are seeking opinions from experts and enterprises on the best ways to revive the economy, a top city official said yesterday at a seminar.

Nguyễn Thiện Nhân, secretary of HCM City Party Committee, said: “Việt Nam and HCM City in particular need to open the economy and tourism under specific conditions. The biggest challenge is how to control the risk of infection of more than six million foreign tourists who could enter Việt Nam by the end of the year.”

“The recovery of the economy is a huge challenge for the city economy.”

The priority is to prevent the bankruptcy of enterprises by providing income to workers so they can keep their jobs.

“We must ensure that enterprises restore production and services as soon as possible to meet domestic demand,” Nhân said. “It’s important to encourage domestic production to replace imported goods and expand domestic value chains.” 

The city also needs to work closely with major partner countries to open up economic and tourist activities at the appropriate time, according to Nhân.

Digital transformation of enterprises, completion of a digital database of all economic sectors, and promotion of “smart city” implementation should be on the agenda as well.

Nhân said the city targeted disbursement of over 80 per cent of public investment projects by October.

He urged the second-phase construction of new industrial parks and hi-tech parks and called for investment in innovative urban areas in the eastern part of the city. Real estate companies should also be supported as well as innovative start-ups in the city.

Nguyễn Thành Phong, chairman of the People’s Committee, said the city’s economy in the first quarter of the year grew only 0.42 per cent  compared to the same period last year, the lowest since 1986.

“The city has over the years achieved an average economic growth rate higher than the national average from 1.1 to 1.2 times. Slower growth will have a negative impact on the country’s growth,” he noted.

There are a number of problems that the city has to address in the coming time, especially since global supply chains have been affected.

Phong said the city must find ways to optimise the purchasing power of the domestic market as many people have become more frugal during this challenging period. 

HCM City will focus on industries with high economic growth such as food and beverage production and the processing industry, and manufacture of electronic products, computers and optical products, according to Phong.  

Other industries that need Government support include wholesale, retail, transportation, warehousing, finance and banking, and insurance.

Four scenarios

Dr Trần Hoàng Ngân, director of the HCM City Development Research Institute, predicted that the city economy could grow 2.5 per cent under the most pessimistic scenario, while the most optimistic scenario would see a growth of 5.4 per cent.

The city’s economy is predicted to decline due to the outbreak as seen in the low gross domestic product growth (GRDP) of only 0.42 per cent in the first quarter compared to 7.64 per cent in the same period last year, he said. 

The most negative scenario would include a prolonged epidemic, increasing geopolitical instability, world recession, and difficult recovery for the city’s major economic partners such as the US, the EU, South Korea and China.

Under more positive scenarios, the city economy would grow between 3.4 and 4.12 per cent. 

The most optimistic scenario is based on the assumption that the world economy would grow slowly but not fall into recession. If so, the growth of HCM City would be about 5.42 per cent.

However, figures for the first quarter of many countries show that the sign of recession is imminent in countries hit by COVID-19.

According to Ngân, the city should continue to take serious measures to achieve the dual goal of ensuring social security and economic recovery. 

“This year’s economy is definitely declining, but the city needs to ensure that it will grow more strongly next year,” he said. — VNS