Growth of Vietnam’s largest economic hub below expectations

By Diana M. Cleto

Vietnam’s largest economic hub, Ho Chi Minh City (HCMC), recorded a gross regional domestic product (GRDP) growth rate of 7.51% in the first quarter – its highest Q1 growth rate since 2020.

Le Thi Huynh Mai, director of the HCMC Department of Finance, also revealed that GRDP during the period hit $17.7 billion.

Latest figures

According to a report by the Vietnam News Agency, industry expanded by 5.7%, while services rose by 8.72%. Retail and consumer service revenues increased by 14.2%.

Meanwhile, exports reached $11.7 billion, up 5.05%, and imports totalled $15.6 billion, up 15%.

Tourism revenue jumped by 26.7%. The city also collected $5.8 billion in state budget revenue, reaching 29% of its annual target and up 7.72%.

Public investment disbursement in the period came to $176 million, reaching 5.4% of the annual target.

Nguyen Khac Hoang, head of the HCMC Statistics Office, called the 7.51% growth a positive development but warned that it also reflects the difficulties ahead.

He said that the city needed a Q1 growth rate of 8.38% to 8.54% to stay on track for its annual target of 8.5-10%, indicating that the current pace falls short.

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Experts urge focus on business development, innovation

Experts have emphasised that, in order to achieve double-digit growth this year, HCMC needs to prioritise two key areas: fostering business development and promoting scientific and technological innovation.

In the first quarter of the year, 6,632 new businesses were established with a combined registered capital of over $1.62 billion, down 39.7% in the number of firms and down 55.2% in capital compared to the same period last year.

Furthermore, 16,904 companies temporarily closed down, up 10.3%.

Experts have stressed that further research must be conducted to identify the causes behind these closures and to develop solutions to support business recovery.

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How HCMC plans to navigate US tariffs

HCMC authorities will enhance support by providing timely information, conducting market surveys, and studying the benefits of free trade agreements, Nguyen Truc Van, director of the Center for Socioeconomic Simulation and Forecast at the HCMC Institute for Development Studies, said in response to concerns over the 46% reciprocal tariff on imports from Vietnam announced by United States President Donald Trump.

This will help companies proactively develop products that meet market demand, he added.

Additionally, training programs to boost international business skills, trade promotion efforts, and cross-border electronic commerce initiatives will be introduced to help businesses diversify their export markets, the official promised.

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