Retail, manufacturing sectors slow HCM City economy

Ho Chi Minh City, May 31 (VNA) – The slowdown in retail and manufacturing sectors has reduced the speed of HCM City’s economic engine despite significant gains in services, trade, industry and agriculture. At a regular meeting on the Vietnamese city’s social-cultural-economic, and defence-security situation on May 30, the statistic figures showed mixed signals on the city’s economic development. In the first five months, the city’s consumer price index increased only 0.86 percent, propped up mainly by hikes in transport, electricity, water and building materials to compensate for businesses’ and peoples’ spending on tourism, clothing and entertainment. Industry is another sector showing a slowdown with the industrial production index rising only 3.4 percent in May, a considerable reduction against the level of 8.5 percent in May, 2015. The city’s main import goods include machinery and materials for production like pharmaceuticals, electronics, spare parts and cars, which highlights the city’s weakness in terms of rate of localisation in industrial products. According to the city’s Department of Planning and Investment, the city has exported 11.89 billion USD, up 1.2 percent from last year but has imported 14.05 billion USD, an increase of 9.2 percent against last year. At the meeting, Nguyen Thanh Phong, Chairman of the People’s Committee, said it is a concern that local retailers only possess 36 percent of market share in comparison with 51.5 percent share of foreign companies. He said a strategy to help local companies avoid losing more market share is necessary to prevent adverse impacts on local manufacturing. He asked the municipal Department of Trade and Industry to soon complete the planning for retail systems, service and trade businesses in the city, and build the city’s brand programmes for each of the city’s key products. Phong also asked departments to seek solutions to enhance the competitiveness of enterprises as the country will soon implement numerous free trade agreements./.