HCM City faces economic challenges amid high inflation

HCM City, June 5 (VNA) - Rising inflation poses economic challenges for Ho Chi Minh City, with officials predicting tougher times ahead for Vietnam’s largest city.

Its Consumer Price Index (CPI) increased by 4.27% in the first five months, impacting residents' budgets, according to a report by the city’s Statistics Office.

In May, the CPI rose 0.35% from April and 4.5% year-on-year. Of the 11 categories measured, eight saw price hikes, particularly in goods and services, which rose by 1.33%.

Healthcare and medicine costs surged by 17%, while overall CPI growth for the first five months remained at 4.27%.

Meanwhile, transportation costs dropped by 0.4% in the first months.

Speaking at a meeting on June 3 on the city’s socio-economic development, Nguyen Khac Hoang, head of the Statistics Office, said the city’s inflation rate exceeds the national average and neighbouring provinces (between 1.5% and 2%).

The city is also expected to face more challenges in the second half of the year due to US countervailing duties affecting local production.

According to a report by the Department of Finance, the city’s total retail sales and consumer service revenue in May reached 113.36 trillion VND, up 19% from April.

For the first five months, total revenue is projected at 544.44 trillion VND, up 16.8% year-on-year.

The city’s tourism sector generated 98 trillion VND in revenue in the first five months, up 28.9% year-on-year.

The city received over 3.12 million international visitors, up 40.2%, while domestic tourism accounted for over 15 million visitors, up 7.7%.

Export turnover grew by 3.4% in May from the previous month, reaching 20.36 billion USD in the first five months, up 16.1% year-on-year.

Industrial production index (IPI) increased by 5.1% in May and 9.4% year-on-year, with an annual rise of 8.2%.

However, challenges persist as public investment capital disbursement has fallen short of targets, and the number of businesses dissolving or temporarily suspending operations has risen.

As of May 28, 8.71 trillion VND had been disbursed, only 10.2% of the public investment target for 2025.

New business registrations totalled 13,894, down 31.4% in quantity and 54% in capital.

However, supplementary registered capital surged by 89.7 % year-on-year to 234.13 trillion VND.

In the first five months, the total registered and supplementary capital reached 313.75 trillion VND, up 5.9% year-on-year.

Despite the challenges, which include 1,534 business dissolutions (up 8.4%) and 20,382 temporary suspensions (up 6.7%), 7,583 businesses resumed operations, maintaining last year’s figures.

HCM City has set a target this year to achieve at least 8% growth./.