Ho Chi Minh City: Enterprise exports and imports are still decreasing sharply

	Positive signals from Ho Chi Minh City's activities to stimulate demand, connect domestic consumption and export
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Customs in HCM City are carrying out customs procedures for importing goods. Photo: T.H

Both exports and imports have decreased

According to the HCM City People's Committee, import and export activities of enterprises in the city continue to face difficulties, with imports and exports declining significantly.

Specifically, the total export turnover of goods of city enterprises at various national border gates in the first eight months of 2023 reached US$27.5 billion, down 16.1% compared to the same period; the total import turnover of goods of city enterprises at various national border gates reached US$36.2 billion, down 17.3% compared to the same period.

However, industrial production in HCM City has shown positive changes. The index of industrial production (IIP) in August 2023 was estimated to increase by 3.4% compared to the previous month and by 6.6% compared to the same period. This was the highest increase since the beginning of 2023.

Overall, in the first eight months of 2023, the IIP increased by 2.8% compared to the same period. However, the industrial sector has still faced many difficulties: the consumption index of the processing and manufacturing sector decreased by 1.3%; the inventory index increased by 7.8%, and the labour index for the entire industrial sector decreased by 2.1% compared to the same period, and out of 30 second-level industrial sectors, 10 had IIP indices decreased compared to the same period.

Along with that, the purchasing power of the domestic market is still maintained, and tourism activities are recovering slowly. The total retail sales of goods in the first eight months of 2023 increased by 9.6% compared to the same period, and domestic purchasing power was considered a bright spot in the economy as export activities declined.

Accommodation and food services increased by 33.7% in the first eight months of 2023 but only reached 97.3% compared to the same period in 2019 - before the pandemic. Tourism activities increased by 74.6% compared to the same period but only reached 39.3% compared to the same period in 2019.

The consumer price index tends to increase slowly, with the CPI in August 2023 increasing by 0.7% compared to the previous month, and the average CPI compared to the same period tends to increase slowly (January 2023: +5.06% compared to the same period; two months: +4.79%; three months: +4.5%; four months: +4.23%; five months: +4.01%; six months: +3.73%; seven months: +3.50%, and eight months: +3.45% compared to the same period).

According to the HCM City People's Committee assessment, the increase in electricity prices and the minimum wage will put pressure on the consumer price index in the coming time, so inflation control must always be a priority to increase domestic purchasing power and economic growth.

The business environment in the city continues to improve. Up to 42,000 businesses participated in the market in the first eight months of 2023, but there were also 24,879 businesses withdrawing from the market. This means that for every 10 businesses entering the market, six units are withdrawing from the market.

Additionally, new FDI projects registered in HCM City have increased significantly, with 762 new FDI projects registered in the first eight months of 2023, up 59.1% compared to the same period (same period: 479 projects), and the total registered capital reached US$390 million, up 26.2% compared to the same period.

State budget faces difficulties

With many influencing factors, especially the significant decrease in import and export activities, there has been a significant impact on the state budget in HCM City. According to the HCM City People's Committee assessment, the State budget in the city is facing difficulties. The total State budget revenue for the first eight months of 2023 was estimated to reach VND297.993 trillion, achieving 63.4% of the estimate and decreasing by 6.8% compared to the same period in 2022.

Specifically, domestic revenue was estimated to reach VND199.586 trillion, achieving 64.9% of the estimate and decreasing by 2.6%. Revenue from crude oil was estimated to reach VND16.083 trillion, exceeding the estimate by 0.5% but decreasing by 20%. Revenue from import and export activities was estimated to reach VND82.320 trillion, achieving 56.5% of the estimate and decreasing by 13% compared to the same period in 2022.

According to the analysis of the HCM City Customs Department, State budget revenue from import and export activities for the unit in the first seven months of 2023 decreased by VND9,524.5 billion compared to the same period in 2022, primarily due to the decrease in trade volume.

Specifically, the trade volume in the first seven months of 2023 reached US$68.07 billion, of which the taxable trade volume reached US$21.19 billion, decreasing by 19.11% compared to the same period last year (equivalent to an absolute decrease of US$5.01 billion), and tax revenue decreased by 11.50% (equivalent to VND9,524.5 billion) compared to the same period in 2022.

Despite the challenges in the State budget revenue, budget spending in HCM City in the first eight months of 2023 reached 42.6% of the estimate and increased by 43.2% compared to the same period, with regular expenditure increasing by 16.2%. This has created favourable conditions for many economic sectors in the city to thrive.

In particular, although still delayed, the disbursement of public investment has shown signs of improvement. In the first eight months of 2023, disbursements reached 30.9% of the Prime Minister's assigned plan, an increase of 118.4% compared to the same period (disbursements in the first eight months of 2022 reached 18.4% of the plan). With this result, HCM City has identified that the disbursement progress is delayed by two months compared to the set target (the target was 35% disbursement in six months, but only 31% was achieved in eight months).