Ho Chi Minh City is facing challenges to realise its yearly growth target of 7.5%, as the rates recorded in the first and second quarters failed to meet expectations.

In the first three months of this year, the growth of the country’s biggest economic locomotive dropped significantly, even below expectations of experts.

In the second quarter, its gross regional domestic product (GRDP) grew some 5.87%, higher than the 0.15% recorded in the same period last year, raising the city’s six-month GRDP growth to 3.55%, which was however still lower than the 3.82% of the corresponding time in 2022, according to deputy head of the municipal Statistics Office Tran Phuoc Tuong.

Local exporters, including those in the leather-footwear sector, are encountering a host of challenges.

Vice President of the HCM City Leather and Footwear Association Nguyen Van Khanh said leather-footwear exporters are facing a severe lack of orders, and many are struggling to stay afloat.

Meanwhile, about 10-20% of the Association of Garment, Textile, Embroidery and Knitting in HCM City (AGTEK) members have no choice but to leave the market, its President Pham Xuan Hong said.

Experts pointed to major challenges relating to export market, declining domestic consumption and the increasing number of enterprises withdrawing from the market.

In the first five months of this year, up to 18,243 businesses quit the market in HCM City, a gloomy sign for the local economic development.

To deal with the situation, the city has rolled out a bunch of solutions to spur economic growth and stimulate domestic consumption, said Director of the municipal Department of Industry and Trade Bui Ta Hoang Vu.

He also suggested launching more promotion programmes this summer to stimulate domestic consumption, saying this is also a solution to be pursued by the tourism sector in the time ahead.

Director of the State Bank of Vietnam (SBV) in HCM City Vo Minh Tuan noted that some commercial banks are now ready to ensure businesses’ access to credit loans.

Chairman of the municipal People’s Committee Phan Van Mai stressed that the city has identified public investment disbursement as a key task, contributing to supporting the local economic growth in the second half of this year.

The disbursement rate is expected to stand at 35% at the end of this month, he said, adding that the city will also optimise its special mechanisms and policies to attract investments in transport and urban infrastructure, and boost the development of other sectors.

VNA