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Friday, December 2, 2022

HCMC’s 2023 economic growth forecast at over 7%

By Thai Huy

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HCMC – The HCMC Institute for Development Studies (HIDS) has envisioned three scenarios for the city’s 2023 economic growth, with all projected at 7% or higher despite economic uncertainties likely to continue into next year.

In the first scenario, in which China’s zero-Covid policy and real estate crisis adversely affect global supply chains, coupled with a global recession and falling demand caused by monetary tightening in major economies, HCMC’s economy would expand 7.03%.

Under this scenario, the scarcity of food and fuel would worsen and inflation would rise further, dampening investor confidence and weakening consumption.

The stock and financial markets are expected to continue going downhill, leading to a budget deficit among businesses and slowing capital disbursements for public investment projects.

In the second scenario, the city would attain growth of 7.5% as it regains its growth momentum on China’s easing of its zero-Covid policy, leading to Chinese tourists returning to Vietnam.

At the same time, the military conflicts between Russia and Ukraine would wind down, stabilizing global oil supplies. Relief packages would start to produce results, such as a improvement of production and consumption.

However, export growth would decelerate in the short term, while tax revenues would soar due to the rapid recovery of industries, thereby spurring investment and economic growth.

In the last scenario, HCMC’s economy would thrive, as the city’s major trade partners put inflation under control, Russia-Ukraine tensions de-escalate, and China revises its policy, enabling Vietnamese firms to export more to China and expand business there.

These would buoy the demand for labor, stabilize fuel supplies, and fuel consumption, which will in turn help the city achieve growth of 8.08%.

Although hardships linger on until next year, still, the city would double or triple its efforts to recover economically from the impacts of Covid-19, said Vo Van Hoan, vice chairman of the HCMC’s government.

He added that the city would be able to obtain gross domestic product growth of over 8% next year, along with the average annual growth rate of labor productivity of 7%.

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