Hanoi and Ho Chi Minh City among the fastest growing in the world

TPO - Ho Chi Minh City ranks second in the group of fastest growing cities in the world thanks to the increase in the number of high-income households. Hanoi's development prospects are based on the increase in personal assets and the expanding middle class.

On June 7, Savills released the Growth Hub Index - a companion index to the Resilient Cities Index. This index forecasts the economic aspects of 230 cities up to 2033 to identify the fastest growing cities.

Ranking of top 15 growth cities according to the Resilient Cities Index. Source: Savills Research.

Accordingly, cities in India and Bangladesh are expected to see gross domestic product (GDP) growth of more than 68% in the next decade. Bengaluru in India leads the group of growth cities, followed by Ho Chi Minh City in Vietnam.

Data from Oxford Economics at the city-metropolitan level. Future credit ratings at the country level. This analysis focuses only on the group of cities with a GDP of $50 billion or more in 2023.

Vietnam has two cities in the top 15 growth centres, with Ho Chi Minh City’s strong forecast driven by the largest increase in high-income households. Hanoi ’s growth prospects are based on rising personal wealth and an expanding middle class.

The study also analyzed that Vietnam is continuing to lay the foundation to reap the benefits of strong foreign direct investment inflows in the coming decade through groundbreaking changes in infrastructure, regulations and planning.

About 6% of GDP is spent on infrastructure – the highest level compared to other countries in the region. This is the budget source for projects such as Long Thanh International Airport as well as thousands of kilometers of new roads and deep-water seaports.

The government also has a nearly $135 billion plan to reduce its dependence on coal and has been passing new laws at a rapid pace to boost the country's competitiveness, governance and social equity.

The result is a growing tech manufacturing base supported by investment from South Korea, Singapore and China, as well as European companies securing their supply chains out of Asia.

“Vietnam has moved from traditional manufacturing with a dirt floor, with companies just looking for lower labor costs, to a more high-tech, specialized country with high-skilled manufacturing. These activities are bringing long-term value and are creating a larger economy,” said Troy Griffiths, Deputy Managing Director at Savills Vietnam.

According to Savills, the manufacturing sectors that Vietnam can currently carry out include solar panels, electric vehicles, chips, laptop batteries, phones, screens and all related components. However, Vietnam depends on one main investor, for example Samsung, which accounts for 10-30% of the country's GDP, while LG Corp also has a strong presence.

GDP growth forecast chart to 2033 of top 15 Growth Cities. Source Savills Research.

Ho Chi Minh City is a gateway for foreign investment. With an office occupancy rate of 92%, the city’s office market is vibrant, but there is a shortage of Grade A office space. Retail is also growing strongly thanks to abundant domestic demand, driving the modernization of traditional stores.

Hanoi has also recently captured many high-tech manufacturing opportunities, but the city's downside is air quality.

Savills research says that infrastructure investment is expected to change Vietnam’s industrial landscape. Along with these new projects, land will also be set aside for housing development, along with supporting services and amenities.

Duy Quang

Source: https://tienphong.vn/ha-noi-tphcm-vao-top-tang-truong-nhanh-nhat-the-gioi-post1644354.tpo