Hanoi's economy posts strong performance in final months of 2021

Hanoi’s economy continues its upward trend during the final months of 2021, thanks to the strong recovery in industrial production, trade, and services activities.

Production at Garment 10 company. Photo: Thanh Hai

In November, Hanoi’s index of industrial production (IIP) expanded by 4.8% against the previous month and 7.1% year-on-year, thanks to manufacturers speeding up production to meet growing demands from locals during the upcoming festive period.

This resulted in the IIP growth of 4.6% for the 11 months. Upon breaking down, manufacturing and processing, accounting for 96.5% of total production value in Hanoi’s industry sector, expanded by 4.5%; followed by production and distribution of electricity (5.1%); sewage treatment and water collection (6.6%); and mining industry (3.5%).

Given the positive growth of industrial production, the payroll in industrial companies during the period also went up 0.2% year-on-year.

The ease of restriction measures and subsequent resumption of mobility have also had positive impacts on total revenue from retail sales and services with VND57.5 trillion ($2.5 billion) in November, up 2.7% against the previous month and 7.7% year-on-year.

This helped narrow the decline with a contraction of 6.3% year-on-year for the 11 months to VND497.4 trillion ($21.6 billion). Of which, retail sales accounted for 69.7% of the total of VND345.3 trillion ($15 billion), other services VND110.4 trillion ($4.8 billion).

Hanoi posted exports of $1.35 billion in November, up 1.2% month-on-month and 16.2% year-on-year, in which export products with high growth included garment, equipment, transport vehicles, and wooden products.

Meanwhile, the number of foreign tourists coming to Hanoi also rose sharply by 10% in November against the previous month to 16,000, and that of domestic tourists to  10,000, or an increase of 2.6%.

In last month, over 2,500 new businesses were set up, up 9% against last month, accumulating a total of 22,100 in the 11 months.

Hanoi also attracted $1.3 billion in FDI, including 330 fresh projects with $210.6 million, 110 projects with additional funds of $634 million.

The city’s budget revenue, as a result, stood at VND238.1 trillion ($10.3 billion) as of present, exceeding the year’s estimate by 1.1% and up 6.4% year-on-year.

Focusing on supporting businesses

Despite the severe Covid-19 impacts, Hanoi aims to end the year 2021 on a high note by setting the growth target at 3%.

As part of the solutions, the city remains steadfast in accelerating the vaccination program and soon launching an economic recovery plan in association with Covid-19 response, with priority fields of trade, services, and tourism, said Chairman of the Hanoi People’s Committee Chu Ngoc Anh.

Hanoi also focuses on creating breakthroughs in digitalization and public investment, along with drastic measures to improve the business environment and address business concerns, he added.

Vice Director of the municipal Department of Industry and Trade Dam Chien Thang said all industrial companies in the city have returned to operation, with the majority reaching the production capacity at 80-90%.

With trade being among the key solutions to boost growth, economist Nguyen Minh Phong called for local businesses to better take advantage of free trade agreements (FTAs) that Vietnam is a part of.

“In addition to penetrating new markets, companies should grasp opportunities from the recovery of key markets of US or Europe to boost exports of the garment, footwear, electronics, and furniture in the year-end shopping season,” Phong told The Hanoi Times.

Vice General Director of Thuong Dinh electric cable company Huynh Tan Quyen suggested the authorities help businesses lower logistics costs and access preferential loans to expand the operation.

Meanwhile, Acting Director of Hanoi’s Department of Industry and Trade Tran Thi Phuong Lan expected the city to soon issue the economic recovery plan that lays the foundation to boost trade, services, and logistics activities; stimulate consumption, promote investment and e-commerce.

Hanoi sets the GRDP growth target of 7-7.5% for the 2021-2025 period, which would require strong efforts to realize such a goal as the growth rate in 2021 is estimated at 3.97-4.45% on Covid-19 impacts.