Ho Chi Minh City Misses Double-Digit Growth Target Amid Price Volatility

Ho Chi Minh City's economic growth for the first half of 2026 reached 8.55%, missing the desired double-digit target, primarily due to significant price volatility. If price fluctuations in the second quarter had mirrored the first, the city could have achieved 10.71% growth instead.

According to Nguyen Khac Hoang, head of statistics for Ho Chi Minh City, the city's Gross Regional Domestic Product (GRDP) for the first six months was an estimated 1.55 million billion VND, marking a 12.94% increase year-on-year. Growth drivers included industrial production, stable consumption, recovering tourism, and increased foreign direct investment, alongside progress on key projects. However, Hoang noted that the high current price GRDP masked lower real growth after accounting for inflation.

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If the price fluctuation in the second quarter of 2026 is equivalent to the first quarter, Ho Chi Minh City will achieve double-digit growth of 10.71% instead of 8.55%.

Price impacts were particularly pronounced in the first quarter, reducing GRDP by 2.11 percentage points. This trend continued into the second quarter, significantly dampening overall growth. Hoang attributed this to rising import costs for raw materials and fuel, which increased production and logistics expenses, subsequently driving up prices for goods and services and affecting purchasing power. International market fluctuations influenced raw material costs, while consumer prices require effective stabilization policies.

Looking ahead, the city faces a substantial investment challenge. It must mobilize 870,000 billion VND in the latter half of the year, requiring a threefold monthly increase compared to the current rate. Despite these challenges, the business environment shows improvement, with a 15.6% rise in newly licensed enterprises and a 26.5% increase in capital, indicating continued investment flow into the economy. However, for every 10 businesses entering the market, eight are withdrawing.

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The main reason is the increase in the price of imported raw materials and fuels, leading to increased production costs, resulting in higher prices for goods and services, affecting purchasing power.