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Over 82% of firms in Vietnam intend to slim down or suspend operations: survey

Over 82% of firms in Vietnam intend to slim down or suspend operations: survey

Friday, May 26, 2023, 21:38 GMT+7
Over 82% of firms in Vietnam intend to slim down or suspend operations: survey
Many apparel firms in Vietnam are facing a lack of orders, thereby expecting to access low-interest loans. Photo: Quang Dinh / Tuoi Tre

Among 9,556 enterprises in Vietnam participating in a survey, 82.3 percent are planning to scale down or temporarily halt their business operations this year, given the ongoing economic turmoil.

About 71.2 percent of these firms are scheduled to reduce their workforce by five percent, according to the survey conducted by the Board of Private Economic Development Studies under the prime minister’s Advisory Council for Administrative Procedure Reform.

Meanwhile, 22.2 percent of the companies are set to cut staff by more than 50 percent.

Besides, 80.7 percent of the respondents intend to lower their revenue by over five percent, while 29.4 percent will halve their earning target this year.

Notably, confidence in Vietnam’s macroeconomic growth is weakening. As many as over 83 percent of the respondents see a bleak prospect for the Vietnamese economy in the rest of 2023. 

A mere 4.2 percent forecast a positive outlook for the economic growth this year.

Many firms are struggling with major challenges, including a shortage of orders, poor access to bank loans, administrative procedures, and concerns over criminalization of economic transactions.

Despite their difficulties, authorities’ support is less effective than expected. As many as 84 percent of these firms supposed the support from local authorities was weak.

As such, many firms put forward multiple solutions to ease their pressure, according to a report on the result of the survey recently sent to the prime minister.

Accordingly, they proposed lengthening the validity of support programs and policies that generated efficiency during the COVID-19 pandemic.

For instance, a two-percent cut in value-added tax should be extended until the end of 2025.

The firms are seeking to reduce social insurance fees, labor union dues and personal income tax, and speed up the tax-refunding process.

Many local exporters suggested cutting corporate income tax to make their products competitive in the global market.

As for bank loans, a referential credit package is a dire need for firms active in key sectors, and small and medium enterprises. 

They also proposed the government not tighten loans for property projects associated with social houses, hospitals, schools, and infrastructure.

Furthermore, the firms expect the government to allow commercial banks to buy back bonds which are reaching maturity dates and cut interest rates of loans for social house buyers.

To improve the investment and business climate, the companies proposed completing ongoing probes into business operations as soon as possible to stabilize the market, boost fairness, and beef up the confidence in the economic growth among enterprises.

The government should limit inspections of companies and offer more support policies to help local firms overcome the hardship, according to the report.

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Tieu Bac - Ngoc An / Tuoi Tre News


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