Dec 6, 2012

Vietnam - About 2013, excellent businesses also keep pessimistic

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VietNamNet Bridge – The latest analysis by Vietnam Report has pointed out that most of the Vietnamese enterprises keep pessimistic about their business performance in 2013.

Vietnam Report on December 4 released the Policy Debate No. 6, a periodic policy research report. The research work is one of the preparatory activities for the official launching of the 2012 VNR 500 – the list of the 500 biggest Vietnamese enterprises, slated for December 11.

Most enterprises are meeting big difficulties and feel pessimistic about their business performance in 2013.

Up to 50 percent of the managers of V1000 enterprises (the 1000 biggest corporate income tax payers) said their business results in 2012 are worse than in 2011.

Only 19 percent said they had a better 2012 than 2011. Meanwhile, 100 percent of the enterprises in the finance and banking sector said 2012 was worse. Sixty percent of the enterprises in the material & construction sector said the same thing. Meanwhile, the proportions were lower in other business fields.

Especially, the enterprises believe that the situation would not be improved in 2013, which means that they would have to encounter with difficulties longer.

Fifty-five percent of enterprises believe that the conditions would not be much better in 2013. The number of businesses believing that 2013 would be worse is lower than the number of businesses believing in the opposite thing.

Two thirds of the polled enterprises said they do not think the national economy would recover in 2013.

Only 33 percent believe the national economy would begin recovering in the second half of the next year, and only one percent expects the recovery in the next six months.

As such, the optimism about the economic recovery has decreased if compared with August, when 60 percent of businesses said they hoped the economy would regain its strength in 2013 or sooner.

2013 would be another tough year for businesses

The uncertainties in the business environment, the declines in the consumption demand and the material price increases are the three biggest concerns for businesses in 2013.

Besides, the enterprises have also expressed their concerns about the policy changes and the difficulties in bank loan access in 2013.

However, though keeping pessimistic about the prospect of the national economy and the challenges awaiting them ahead, most of the enterprises have confidence on the government’s commitments to fight against inflation.

The enterprises said they have confidence on the Prime Minister’s message about the one-digit inflation in 2013, released when giving the interview to Bloomberg in Hanoi on November 28.

Only 19 percent of businesses think that the 2013’s inflation rate would be at two digit level.

Especially, up to 76 percent of businesses said they plan to borrow money from banks to run their production in 2013. The figure shows a considerable improvement in terms of businesses’ confidence in the banking system, if noting that 60 percent of CEOs said banks have not helped businesses in a survey conducted in August.

However, up to 50 percent of businesses said they would only rely on their own capital in 2013.

More than 90 percent of business managers believe that the restructuring has been undertaken at Vietnamese enterprises. The majority of enterprises plan to keep the same labor force and capital scale in 2013. The number of enterprises which plan to increase the labor force is three times higher than the number of enterprises which plan to cut down the workforce.

Vietnam Report

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