Optimism
in the economy suffered a second successive fall in the third quarter in Viet
Nam, a global survey by auditing and consulting firm Grant Thornton has found.
The International Business Report poll of more
than 2,700 businesses in 39 economies in August-September found that only 38
per cent of Vietnamese respondents were optimistic about the economic outlook
for the next 12 months, compared with 54 per cent last quarter.
"In Q1/2011, the Government took some
strong decisions in the management controls of monetary and financial policy,
especially to reduce interest rates and increase credit growth," Ken
Atkinson, managing partner of Grant Thornton Viet Nam, said.
"Whilst these are beginning to have an
effect, it is the first time in my 20 plus years here that I have seen so many
Vietnamese business owners pessimistic about the future."
The country experienced a welcome slowdown in
inflation in Q3 (July – 1.17 per cent, August–0.93 per cent, and September–0.82
per cent), which suggests the worst may be over.
"Whilst there has been a certain amount
of de-stocking, businesses generally are suffering from the burden of high borrowing
costs (72 per cent) and shortage of working capital (50 per cent)," he
added.
Wage increases seem set to continue to add to
the inflationary pressure with 70 per cent of respondents indicating salary and
wage increases over the next 12 months would be in line with or above
inflation.
The report lays bare the dramatic impact of
economic uncertainty and financial instability on the global business
community.
It reveals that net global business optimism
has collapsed from 31 per cent to just 3 per cent.
Ominously, this uncertainty has also spread to
key emerging markets, with both China and India seeing net optimism decline by
29 per cent.
The optimism of business owners in mature
markets has been hit particularly hard; in North America, optimism has dropped
from 43 per cent to 3 per cent, and in the EU, from 34 per cent to zero.
Ed Nusbaum, CEO of Grant Thornton
International, said: "These figures are the worst since 2009, when we were
in the midst of the global recession. The worrying thing is that negative
sentiment about the wider economy is now damaging business growth prospects.
"Businesses, particularly in developed
countries, are telling us they feel they have no control over how things are
going to turn out. There's a perception that attempts to create stability and
stimulate growth just have not worked. An economic outlook that appeared to be
improving just three months ago has been replaced with one of total
uncertainty."
The prospect of businesses driving growth is
being constrained by the on-going uncertainty, especially in many mature
markets where governments and consumers are reining in spending.
Globally, business expectations for
employment, revenue, and profits have fallen by 11, 10, and 9 percentage points
respectively.
In Viet Nam the corresponding figures are 10
per cent for employment and 6 for revenue but 14 per cent of respondents expect
a decrease in profits.
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