Hanoi's economic growth set to reach 3.94% this year

Hanoi’s gross regional domestic product (GRDP) growth is estimated to reach 3.94% this year, which is lower than the year’s target of 7.5% but would be 1.5 times higher than the national average (2.5–3%), according to Vice Chairman of the Hanoi People’s Committee Nguyen Doan Toan.

Hanoi's leaders at the meeting.

For the 2016 – 2019 period, Hanoi’s average GRDP growth was 7.36%. In 2020, given the severe impacts of the Covid-19 pandemic, the city’s average economic growth in the 5-year period of 2016 – 2020 would be 6.67% (higher than the national average of 5.9%), informed Mr. Toan at a meeting on November 28.

Additionally, Hanoi’s nominal GRDP stood at VND1,024 trillion (US$43.5 billion) in 2019, resulting in income per capita of US$5,250, or 1.43 times that in 2015 and 1.9 times  the national average.

In 2020, the productivity is estimated at VND253 million (US$10,900), 1.65 times the national average.

There has also been a positive shift in the economic structure, with a higher proportion in the services, industry and construction sectors from 85.75% to 86.1% and a lower contribution from the agro-forestry-fishery sector.

The industry and construction sector would maintain a positive growth rate of 6.76% this year, in which industry is set to expand by 5.64%, and results in an average growth of 7.65% in the five year-period.

Additionally, total retail sales are estimated to grow by 2.4% for this year, services by 3.1% and exports by 3.5%.

For the 2016–2020 period, services are projected to grow by an average of 6.36%; total goods retail sales and services revenue is set to reach by 9.10% per annum, and exports by 9.18%, 1.7 times higher than that of in the 2011–2015 period.

Hanoi’s consumer price index (CPI), a gauge for inflation, would grow in a range of 2.73% - 2.79% this year.

Over the years, tourism has become Hanoi’s spearhead economic sector, with revenue growing by an average of 12.1%. Last year, the city welcomed over 7 million foreign tourists and was included among the top 10 destinations for travelers around the world.

However, the Covid-19 pandemic has led to a plunge in the number of international tourists, and the figure could be around 1.11 million this year.

The agricultural sector has been a key contributor for growth this year with an estimated growth rate of 4.2%, a record rate in the last several years.

Total social investment capital in 2020 is estimated at VND416.15 trillion (US$18.03 billion), accumulating a total of VND1,725 trillion (US$74.7 billion) in the 2016 – 2020 period, and 1.65 times that of in the 2011 – 2015, or 39.1% of the GRDP.

For the 2016 – 2020 period, Hanoi is forecast to attract US$25 billion in foreign direct investment, up 3.9 times that of in the 2011 – 2015 period.

A highlight of Hanoi’s economic performance this year is the city’s budget revenue reaching an estimated VND279.3 trillion (US$12.1 billion), 0.2% higher than the target set by the municipal People’s Council and 3.5% year-on-year.

Meanwhile, the city’s expenditure is 84.7% of the estimate at VND87.46 trillion (US$3.78 billion).

For next year, Hanoi expects its economic growth to accelerate to 7.5% as the city would continue to pursue the dual target of both containing the pandemic and boosting for economic recovery, stated Mr. Toan.