Vietnam's Economic Engine Gains Momentum Once More

In the second quarter, retail sales of consumer goods and services in Ho Chi Minh City reached VND298 trillion (US$12.6 billion), marking a 13% and 9% increase from the previous quarter and the same period last year, respectively. Additionally, public spending in the city during the second quarter amounted to an estimated VND10.26 trillion, showing an 89% rise compared to the first quarter and a 44% increase from the same period in the previous year. Overall, public spending in the first half of the year reached VND15.7 trillion, reflecting a year-on-year growth of 44%.

These positive economic indicators have contributed to the city’s overall growth, with a 5.87% expansion in the second quarter and a cumulative growth rate of 3.55% in the first half of the year. Economist Tran Du Lich views this growth as remarkable, surpassing the national rate. Moreover, the city’s regional inflation rate remained low at just 0.17% in June, indicating a gradual easing of price rises since the beginning of the year.

The services sector played a significant role in driving growth, accounting for 86% of the city’s overall growth in the first half of the year. According to the HCMC Statistics Office, the services sector expanded by 4.96% year-on-year. Notably, Ho Chi Minh City achieved the highest tourism revenues in the country, reaching VND80.8 trillion, a remarkable 163% increase compared to the same period in 2019, the year before the COVID-19 pandemic. The city welcomed over 18 million visitors, representing a year-on-year increase of 48% and a 5% rise compared to 2019.

A study conducted by the General Statistics Office revealed that for every 1% increase in public spending, there is a corresponding 0.06 percentage point increase in GDP. However, in Ho Chi Minh City, the impact of public spending could potentially be even more significant, further boosting economic growth.