In the remaining six months of 2020, Hanoi would continue to carry out drastic measures to boost economic recovery and overcome severe impacts of the Covid-19 pandemic, according to Nguyen Doan Toan, vice chairman of the Hanoi People’s Committee.

Vice Chairman of Hanoi People's Committee said the city considers economic recovery priority in remaining 6 months. Photo: Thanh Hai.

Among measures to recover from the pandemic, Hanoi would take this crisis as an opportunity to reshuffle economic activities and attract investment from multinationals, Toan said at a meeting of the Hanoi People’s Council on July 6.

Additionally, Hanoi would help enterprises form new linkages and value chains of both domestic and abroad, he added.

While the Covid-19 pandemic has caused severe consequences to the city’s economic performance, Hanoi continues to pursue the dual target of containing the pandemic and boosting economic growth, Toan stated.

The city has waived or delayed tax payments worth VND17.5 trillion (US$757.4 million), or 45% of the total amount of tax deferrals nationwide, for enterprises.

According to Toan, Hanoi has been pushing for industrial development, including the acceleration of the construction progress at 19 industrial parks, as well as the decision to form 23 new ones.

Toan mentioned the “Hanoi 2020 – Investment and Development Cooperation” conference, held on June 27, as one of the city’s key efforts to boost investment from domestic and foreign players. During the event, Hanoi’s authorities gave investment licenses to 229 projects worth a combined US$17.8 billion.

Additionally, 36 memorandum of understandings (MOUs) worth US$26.08 billion were signed during the event, including 23 MOUs with domestic enterprises (US$17.85 billion) and 13 with foreign ones (US$8.22 billion).

Hanoi has recorded 12,649 newly established enterprises in the first half of 2020 with registered capital of a combined VND175 trillion (US$7.55 billion), down 7% in the number but up 5% in value year-on-year.

To date, Hanoi has over 290,000 operational enterprises, and business registration can now be made online.

Toan tipped that Hanoi will further boost IT application in online meetings, e-commerce, e-payment, or online study, among others. The rate of public online services provided at advanced stages of 3 and 4 out of the 4-scale evaluation is at 100%, of which 30% are at level 4.

Overview of the conference.

Economic growth significantly higher than national average

Hanoi’s gross regional domestic product (GRDP) is estimated to have expanded 3.39% in the first half of 2020, the slowest 6-month growth in many years. The growth rate, however, remains among the highest nationwide and is significantly higher than the national growth average of 1.81% during the period.

In the January – June period, the sector of agriculture, forestry and fishery increased by 1.61%; the sector of industry and construction rose by 5.94%; and the service sector climbed by 2.59%.

The city's state budget revenue rose 9.9% year-on-year to VND142.01 trillion (US$6.14 billion), or 50.9% of the year's plan, while the budget expenditure climbed 21.5% year-on-year to VND34.21 trillion (US$1.47 billion), or 33.2% of the yearly plan.

Hanoi has so far disbursed VND14.82 trillion (US$639.45 million) worth of public investment, or 33% of the target, up 64.4% year-on-year.

As global supply chains are disrupted by the Covid-19 pandemic, Hanoi’s exports in the January – June period declined 6.7% year-on-year to US$6.75 billion, and imports fell 9.2% to US$13.71 billion.

During the six-month period, Hanoi’s Index of Industrial Production (IIP) grew 3.5% year-on-year.

Total retail sales of consumer goods and services in Hanoi in the six-month period are estimated to expand 6.6% year-on-year to VND1.408 trillion (US$60.94 billion).

As tourism is one of the groups hardest hit by the pandemic, the number of tourists to Hanoi plunged 65.4% year-on-year to 4.93 million in the January – June period, including a decline of 68.8% in foreign tourists and a contraction of 61.5% in revenue from tourism activities.

Two growth scenarios for 2020

Based on preliminary data from the first half of 2020, Hanoi’s authorities have devised two growth scenarios for the remaining six months of the year.

In the first scenario and also the most optimistic one, Hanoi could achieve a growth rate of 5.9% in 2020, 1.3 times the nation’s optimistic growth scenario of between 4.4 and 5.2%, if growth rates in the third and fourth quarters reach 7.8% and 8.4%.

In a second scenario, Hanoi’s GRDP would expand 5.4%, 1.3 times the nation’s neutral growth scenario of 3.6 – 4.4%, if the city’s economy expands 6.9% and 7.4% in the third and fourth quarters, respectively.

Secretary of Hanoi’s Party Committee Vuong Dinh Hue said the city aims for an economic growth rate at 1.3 times the national average and strives to fulfill the state budget revenue targets set by the National Assembly for this year.