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Ho Chi Minh City's economic growth to slow this year

Ho Chi Minh City's economic growth to slow this year
Ho Chi Minh City is planning a more service-based economy in the next five years. Photo by AFP

The economy of Ho Chi Minh City is well on track to expand 7.6 percent in the first nine months and 8 percent by the end of the year, officials have said.

That would be the lowest annual growth rate in the last 6 years, when Ho Chi Minh City's GDP growth rate ranged from 9.2 percent in 2012 to 11.8 percent in 2010. Last year the rate was 9.85.

Vietnam's economy as a whole is estimated to grow 6 percent this year, down from 6.68 percent in 2015. It is cooling down due to a decline in agriculture, as a historic drought has hurt rice and coffee production.

Ho Chi Minh City is shifting its economic focus to the service sector, which is expected to contribute 60 percent to the GDP by 2020.

Nearly 26,000 new companies with a total capital of more than VND212 trillion ($9.5 billion) were launched in the first nine months, accounting for a third of all new entries nationwide.

The city since 2014 has also carried out an ambitious plan to reduce the number of state-owned companies sharply from more than 100 to only seven by the end of 2018. It has succesfully privatized, shut down and merged around 40.

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