Ho Chi Minh City Government Presents Clear Plan for Future Economic Growth
HCMC – Ho Chi Minh City (HCMC), Vietnam’s economic heart, has recently announced a comprehensive plan for socio-economic development through 2020.
This plan will ensure that the city, in the words of the HCMC People’s Committee, “will strive to become a multi-functioning economic, social and cultural center with [a] modern infrastructure system by 2020.”
Chairman of the HCMC People’s Committee, Le Hoang Quan, affirmed that the government’s approval of the master plan for the socio-economic development of the city meant that business leaders, foreign investors, and citizens in general could rely on strong and reliable economic growth from the city for years to come. Quan stated that the plan would be put into effect as soon as possible.
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.
As part of this ambitious goal, the city will develop new facilities for science and technology, healthcare, education, training and sports.
The HCMC government also laid out a number of economic goals that the city must reach, these include:
- An economic growth rate of:
- 10 – 10.5 percent in 2011-2015
- 9.5 – 10 percent in 2016-2020
- 8.5 – 9 percent in 2021-2025
- An increasing rate of Gross Domestic Product (GDP) per capita:
- US$4,856 – 4,967 by 2015
- US$8,430 – 8,822 by 2020
- US$13,340 – 14,285 by 2025
- During the years 2011-2020, the city’s GDP will be 1.5 times higher than the country’s average growth rate.
A further strategy put forth by the government is to move the city’s economic structure to the model of services-industry-agriculture.
In what is perhaps a sign of the economic growth to come for HCMC, there was VND184.27 trillion in GDP growth for the first quarter of 2014, a 7.7 percent year-on-year (Y/Y) increase. Other important trends include:
- Sales and services revenue in January and February amounted to over US$4.9 billion (VND 103 trillion) – an 11.8 percent increase Y/Y;
- US$1.8 billion earned from exports in February – a 14.7 percent Y/Y increase;
- Agricultural sector – production grew by 6.3 percent Y/Y;
- A 0.18 percent increase in the city’s consumer price index (CPI) for the first three months of 2014 compared to December 2013 (the result of a successful price stabilization program);
- An increase of 17 percent Y/Y in the city’s budget collection – due to an increase of 9.05 percent in the economic sector’s contribution to the local budget.
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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