Impressive growth of Hanoi economy in Q1 2025

THE HANOI TIMES — Hanoi continues to stand out by sustaining a stable growth momentum in Q1 2025, despite ongoing global economic fluctuations.

The city's gross regional domestic product (GRDP) increased by 7.35% in the first quarter of 2025, the highest first-quarter growth in five years, which reflects its robust and resilient recovery despite ongoing global challenges.

The city achieved 49.5% of its annual revenue target, up 69.3% year-on-year, according to the municipal Statistics Office.

Remarkably, investment from the local budget totaled VND14.3 trillion ($583 million), up 43.8% year-on-year, the highest in the country.

Foreign direct investment (FDI) also posted strong results, with total registered capital reaching $1.4 billion, up 49.5% year-on-year, underscoring Hanoi's improving investment environment and growing international investor confidence.

Trade and service activities remained buoyant, with total retail sales of goods and consumer services up 13.3% year on year, while the consumer price index (CPI) rose slightly in Q1 2025, supported by macroeconomic stability and domestic consumption.

Import and export activities rebounded strongly, with total sales in the first quarter reaching $14.3 billion, the highest level in several years and up 7% year-on-year. Among economic sectors, agriculture, forestry, and fisheries grew by 3.09% in Q1 2025 while the industry and construction sector expanded by 5.54%. Notably, the service sector recorded the highest growth at 8.34%.

In the industrial sector, the Index of Industrial Production (IIP) rose by 4.3% in the first quarter. This recovery is being driven by strong export demand and proactive support from the city government to help businesses resolve challenges and accelerate production.

In agriculture, Hanoi has prioritized sustainable, organic, and high-tech aquaculture to boost value-added products and protect the environment. GAP-certified aquaculture models based on Good Agricultural Practices are being promoted for broader adoption as they ensure food safety, reduce environmental impact, and improve product quality, increasing market competitiveness and meeting export standards.

Efforts needed

Despite these achievements, Hanoi continues facing challenges caused by global economic fluctuations, including exchange rates, interest rates, and trade policies, which potentially affect exports, investment, and domestic demand.

Based on the Q1 business survey, only 16.7% of manufacturing firms reported an improvement in business performance, while 34.3% continued to experience difficulties. This reflects the uneven pace of recovery across sectors.

In response, the Statistics Office recommends pushing ahead with administrative reform, digital transformation, and stronger governance, along with the implementation of the amended Capital Law and new Capital Planning to offer a more favorable environment for businesses and investors.

Hanoi has also identified inflation control as a key priority, aiming to keep CPI growth below 4.5% to ensure macroeconomic stability and support domestic demand. At the same time, the city is accelerating the introduction of technology, expanding markets, and enhancing the competitiveness of local One Commune One Product (OCOP) items, craft villages, and traditional specialties.

Between January and March, tourist arrivals to Hanoi increased by 18.7%. The city is also accelerating public investment with the construction of key projects such as Tu Lien, Ngoc Hoi, and Tran Hung Dao bridges in early April and in May, and continuing work on Ring Road 4 in the second quarter.