Saigon’s impressive economic growth might help its residents achieve US$9,800 in average annual income soon.
On Wednesday, municipal authorities held a conference with members from the government and the private sector to promote investments in the southern hub, Tuoi Tre reports.
Deputy Chairman of the Ho Chi Minh City People’s Committee Tran Vinh Tuyen shared at the event that Saigon is on a path to attain a per capita income of US$9,800 (VND223 million) by 2020 – a 22.5% increase compared to 2014. However, this will only be reachable if Saigon manages to sustain economic growth of at least 8.5% until then.
Tuyen added that from 2011 to 2015, Saigon’s gross regional domestic product (GRDP) grew at a steady rate of 9.6% per year, 1.66% higher than the national average. A transition from agriculture to industry and services will see Saigon grow further from 2016 to 2020 at a rate of 8.5% annually, the official said.
Specifically, the deputy chairman is confident that by the beginning of the next decade, at least 56% of Saigon’s GRDP will be contributed by services. Ho Chi Minh City spans only 0.63% of the country’s total area, but Saigoneers contribute 21% of Vietnam’s GDP and one-third of the state budget.
Despite its robust economy, Saigon is only allowed to keep 23% of its yearly income, while the remaining 77% is kept by the central government.
This time last year, central authorities came up with a new budget proposal that would force Saigon to give up even more of its income. Should the plan be approved, the city will only be able to retain 17% of its earnings for municipal projects between 2017 and 2020.
A recent study conducted by Oxford Economics suggested that Saigon would be Asia-Pacific’s second-fastest growing city by 2021, just behind India’s New Delhi. The report deemed Saigon a “high potential city” whose growth is driven by low costs, market expansion and high levels of foreign investment.
