Ho Chi Minh City’s economy showed positive signs of recovery in the first quarter of this year with an estimated 1.88 percent growth of gross domestic product (GRDP) compared to the same period last year, Director of HCM City Department of Planning and Investment Le Thi Huynh Mai said on April 5.

The growth, against a deep decline in the third and fourth quarters of 2021 with -24.97 percent and -11.64 percent, respectively, reflects the potential and vitality of local enterprises, she said at a meeting of the municipal People’s Committee on socio-economic growth in the first quarter of 2022 and key tasks for the second quarter.

In the period, 9,150 new enterprises were established with a total registered capital of nearly 146 trillion VND (6.3 billion USD) .

More than 98 percent of production facilities in the city have resumed operations, allowing smooth and uninterrupted circulation of goods.

Despite negative effects by the COVID-19 pandemic, the import and export turnover of HCM City continued to maintain a recovery momentum. The city’s total goods export turnover in the first three months of this year was estimated at 11.9 billion USD, up 3.5 percent over the last year’s figure while import turnover reached 17.4 billion USD, a year-on-year increase of 18.4 percent.

Total state budget revenue in the first quarter of this year was estimated at more than 121 trillion VND, accounting for 31.3 percent of the estimate and increasing by 9.4 percent over the same period.

Besides positive signals, according to Mai, the city’s economy still had some problems such as a sharp decrease in foreign direct investment (FDI) attraction, a decline in retail service revenue, and negative growth in the construction sector.

Specifically, it attracted 406.58 million USD in FDI between January and March, a year-on-year decrease of 40.09 percent. Meanwhile, total retail sales of consumer goods and services dropped by 4.8 percent over the same period.

To cope with challenges posed by the ongoing COVID-19 pandemic, the Russia-Ukraine conflict and rising cost of materials and fuel, the city will continue to improve the investment environment, solve difficulties for local residents and enterprises as well as promote investment for the smart city project for 2017-2025 period and the establishment of an innovative urban area in the east of the city for 2020-2025.

Chairman of the municipal People’s Committee Phan Van Mai said solutions should be set forth to support the people as revenue from consumer services decreased while the consumer price index and raw material prices increased.

It is necessary to enhance the business investment environment to attract FDI, he said.

The city will focus on removing difficulties for electronic industrial manufacturing, construction and tourism, which will be the pillars for the economy's recovery and development, Mai said./.