A view of HCM City at night. The city is expected to face economic headwinds during the rest of this year. — VNA/VNS Photo

HCM CITY — HCM City’s economic growth is expected to climb to 5.87 per cent in the second quarter of 2023, its leader has said.

It was only 0.7 per cent in the first quarter.

Speaking at a meeting on Tuesday, Phan Văn Mãi, chairman of its People’s Committee, said its economic growth in the first half is expected to be 3.55 per cent.

Public spending in the first five months is expected to be worth VNĐ10.2 trillion (US$436.4 million), up 24 per cent year-on-year, he said.

The global economic decline and high inflation will continue to affect the city’s economy across the board, hindering its recovery, he said.

In May, the index of industrial production (IIP) rose by an estimated 1.5 per cent month-on-month and 5.5 per cent year-on-year.

It was up 1.6 per cent year-on-year in the first five months.

The services sector is expected to post the highest growth rate in the second quarter of 7.6 per cent.

Retail sales of consumer goods and services rose by 10 per cent in May and 6.2 per cent in the first five months.

Headwinds ahead

Experts have warned the city would continue to face headwinds for the rest of 2023 due to the impacts of the global recession and inflation.

The city’s real estate, stock and bond markets have slumped, they said.

Many firms lack export orders, and the situation is unlikely to improve this year.

Many have also complained that while the central bank has steadily cut rates, bank lending interest rates remain too high.

The country’s largest city has lowered its growth target for 2023 to 7.5-8 per cent from 9 per cent last year.

Việt Nam’s GDP growth slowed to 3.32 per cent in the first quarter, the second lowest rate in 12 years. — VNS