Dr. Tran Du Lich is Surprised by the growth of 0.7% in the city. Ho Chi Minh City

DNHN - Dr. Tran Du Lich, an expert who has followed Ho Chi Minh City for many years, was surprised by the 0.7% growth, despite having been informed in advance. He stated that the Department of Planning and Investment's report did not identify the causes

Numerous analysts predict that beginning in the fourth quarter of 2022, the city's economy will continue to fluctuate throughout the first few months of 2023. However, the 0.7% growth rate is unexpected and puts pressure on the target. The city's economic growth target is between 7.5% and 8%.

HCMC's growth rate is the lowest among the five cities affiliated with the central government, namely Hai Phong, Hanoi, Can Tho, and Da Nang, and below the national average, ranking 56/63 locally.

Notably, HCMC's public investment expenditure rate is alarmingly high. As of March 24th, only 952 billion VND, or 2% of the total allocated capital of 43,443,336 billion VND, have been disbursed.

The city once established the objective of effectively disbursing public investment capital as "prime capital," putting public investment at the forefront of social investment. However, because of the disbursement results, this objective also faces numerous obstacles.

Dr. Tran Du Lich, an expert who has followed Ho Chi Minh City for many years, was surprised by the 0.7% growth rate, despite having been informed in advance.

Since the fourth quarter of 2022, he says he has repeatedly identified the causes. The goal is for the global financial market and real estate market to have an impact on the Vietnamese economy in general and on Ho Chi Minh City in particular. These two factors exert pressure on the economy of the city.

"However, by the first quarter of 2023, the situation in the entire nation had improved, as the bank was able to overcome the risk of failure, control inflation and the exchange rate, and respond to the global financial markets. The circumstance ought to have improved, so why is growth so low?" - the specialist asked.

The Government and Ho Chi Minh City have established three main pillars to gradually return the city's economy to grow. The most important pillar of which is still a public investment.

"Social investment will be determined by how public investment performs." At the end of the first quarter of the year, however, TP had only disbursed 2%. The city has abandoned all public investment tools designed to stimulate the economy," the expert stated bluntly, highlighting the most significant factor in the city's economic decline.

Second, the capital has not yet been absorbed by the city. This issue was also raised at the end of the 2022 meeting with ten solution groups. In it, he stated that the emphasis is on publicity and transparency of exceptional projects and that what to do and what not to do must be specified. Nevertheless, based on his observations, the city has not utilized this capital absorption tool.

As for the domestic market's primary pillar, he stated that Ho Chi Minh City's sales services revenue has never been lower than the national average. The national rate reached 10.3%, while the city's rate was only 3.3%.

"Three pillars to boost the economy are considered a medicine for the city to overcome the epidemic, but they are not being utilized effectively," said Dr. Lich, wondering how far the city has implemented these pillars.

In the first month of the second quarter of 2023, Dr. Lich did not offer any additional economic solutions for the city. He asserted that the city must focus on implementing the three pillars outlined at the end of the previous year; in particular, it is necessary to remove public investment, private investment, and transparency in investment to build trust, absorb capital, and...

In addition, he mentioned that HCMC is currently devoid of activity, as reported by several companies with whom he has worked. "Many things are stalled, how can the city progress? We must address this issue head-on to solve it effectively," Dr. Lich stated, expressing confidence that Ho Chi Minh City's economy will recover by the third quarter of 2023.

He hopes that the city will solve the problems of stagnation and eliminate the obstacles to capital absorption. This cannot be done generally, but it must be open and transparent to inspire business confidence. Dr. Lich stated, "If it is possible, the city will make up for a lost time."

Hong Tham T.h