Ho Chi Minh City Sees Economy Improve
HANOI – Vietnam’s economic center, Ho Chi Minh City (HCMC), is currently seeing a strong period of economic growth. A variety of business sectors are seeing robust growth numbers in comparison to last year.
With a population of over nine million, HCMC (previously known as Saigon) is the largest city in Vietnam. The city’s population is predicted to rise to around 13.9 million by the year 2025.
Vietnam as a whole has seen much stronger economic growth as the world recovers from the recent financial crisis and as the country begins to attract more manufacturing opportunities from China to its own shores.
Over the previous two months, HCMC has seen its sales and services revenue amount to slightly over US$4.9 billion (VND 103 trillion). This is an 11.8 percent increase over the same period last year.
Alongside this trend, the city has seen a year-on-year (Y/Y) increase of 14.7 percent in its level of exports, earning around US$1.8 billion during the month of February.
HCMC is also seeing strong growth in its agricultural sector – production grew by 6.3 percent Y/Y. Vietnam’s agriculture sector is an area where there has been significant countrywide growth. Over the past few years, there has been a marked increase of FDI into Vietnam’s agricultural sector. Previously, this area had been relatively unattractive to foreign investors; however, with the fast approaching conclusion of the Trans-Pacific Partnership (TPP) negotiations, Vietnam’s agriculture industry is becoming increasingly enticing. This Free Trade Agreement (FTA) removes tariffs and other trade barriers between signatory countries, which include the United States, Vietnam, Australia, Malaysia, Singapore, and other countries in the Asian region.
The city’s tourism industry is also seeing strong positive growth for 2014. In February alone, HCMC saw the arrival of an estimated 396,000 tourists. This was a 10 percent increase over the same period last year. Over the January-February period, HCMC has seen an 11 percent increase Y/Y. Vietnam saw over 7.57 million international visitors in 2013, convincingly beating its target of 7.2 million for the year. The figures released by the Vietnam National Administration of Tourism (VNAT) represented a rise of 10.6 percent from the year 2012 (6.85 million). Revenues generated from tourism in 2013 came to US$9.4 million.
Along with the positive economic news, HCMC granted business licenses to over 2,700 enterprises with a total registered capital of over VND 14.36 trillion. It is estimated that these newly created businesses have created 25,000 new jobs.
As the city seeks to keep the positive economic numbers rolling, the Municipal People’s Committee has put forward a list of goals for next month, these include:
- Stabilizing the macroeconomic situation;
- Ensuring social welfare;
- Curbing inflation;
- Stabilizing local consumer demand and prices; and
- Creating advantageous conditions for businesses to increase their production and market share.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam in addition to alliances in Indonesia, Malaysia, Philippines and Thailand as well as liaison offices in Italy and the United States.
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