Tuesday , July 16 2024

HCMC’s 8% GRDP growth target possible with right strategies: study

Ho Chi Minh City can achieve its 2024 gross regional domestic product (GRDP) growth target of 7.5-8% by focusing on boosting aggregate demand and expanding export markets, according to a new study.

The study published on Thursday, named “Macroeconomic Report: 2023 Results and 2024 Forecast,” was conducted by the Statistics Office of HCMC and the University of Economics of HCMC (UEH).

In 2023, HCMC’s GRDP grew 5.8%, lower than the year’s target by 1.7-2 percentage points.

Last month, the city set the target growth at 7.5-8% for this year, which is only possible if the global economic recovery speeds up and the city simultaneously implements multiple policies to boost aggregate demand, experts from UEH said.

Aggregate demand is the total value of goods and services produced and consumed in an economy during a specific period.

By analyzing 2023 quarterly performance indicators, especially consumer spending, exports and imports, the research team assessed that HCMC’s economy had been steadily recovering.

However, the global outlook is not so positive, as most reputable research institutes speculate that global economic recovery will continue to be sluggish in 2024 with very slim chances for a breakthrough due to global supply chain disruption resulting from political conflicts.

The likelihood of American and European banks lowering their interest rates in 2024, especially in the first half, is low.

Foreign trade with the U.S. and Europe, HCMC’s biggest partners, is expected to increase modestly this year while trade with China might even decrease, resulting in more challenges for the city’s exports, the study said.

To boost demand, the research team suggested the city issue policies to promote consumer spending, business and household investments, and exports.

Specifically, the city authority needs to expand exports to other markets like Japan and South Korea.

India, accounting for just 1.41% of HCMC’s exports in the previous year, is also a potentially lucrative market to expand to as its economy is growing steadily.

These policies, combined with solutions to expedite public investment disbursement, resolve bad debts, increase the banking system’s liquidity and improve credit access, will speed up the city’s economic recovery in the second half of 2024, UEH experts said.

Businesses are also optimistic about this year, as 66.7% of state enterprises, 65.3% of private firms and 65.2% of foreign companies have posted positive 2024 forecasts.

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