Vietnam - Businesses expect economic recovery in H2 2013

VietNamNet Bridge – Many enterprises hold a pessimistic view on economic recovery in 2013, but 44% of the surveyed companies still believe the economy could prosper from the second half of 2013 onwards.

This is a result of a survey conducted by Vietnam Report Co. revealed on Monday at an event to announce the top 1,000 corporate taxpayers in 2012 (V1000). The event was co-held by Vietnam Report, Taxation magazine of the General Department of Taxation and Vietnamnet newspaper.

Meanwhile, according to a survey on Vietnam’s economic outlook for 2013 done by the Leading Business Club (LBC), 46.9% of the respondents said the economic situation would remain unchanged next year, 29.7% believed it would worsen, and only 23.4% expected it would prosper.

The latest report by experts from the U.S.’s Harvard University indicates that Vietnam’s economy will still be full of risks and challenges in the next 12 months, said LBC president Pham Phu Ngoc Trai.

As per the report, the global demand will remain weak in the coming 12 months when Vietnam records slow growths in the major export markets. Similarly, domestic demand will stay low as consumers tighten their purse strings under the pressure of inflation and unfavorable economic conditions.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, shared the view that the economy could hardly prosper in the year to come. The prolonged crisis has forced one-third of enterprises in Vietnam, about 200,000 firms, to “leave the market”, he said.

The majority of the businesses that still make profits in time of crisis are medium-sized enterprises with young leaders and growth rates of 30-50%.

Back to the survey conducted by Vietnam Report Company, enterprises in Hanoi and HCMC continue to contribute greatly to the economy, making up 60% of the top 1,000 corporate taxpayers.

Corporate taxpayers in Hanoi have contributed over VND27 trillion to the State budget, accounting for 50% of the total payments of V1000 businesses, while the HCMC-based firms have paid some VND13.4 trillion, or 25%.

The total tax payments of V1000 businesses stand at around VND54 trillion, in which State-owned enterprises (SOEs) have contributed 58.44%, up one percentage point against last year’s ranking. This suggests SOEs have gained high profits, but there is no ground to say they are operating efficiently because their profits might come from monopolistic power.

Despite the tough times, private firms remain the motivation for economic development. The private sector has contributed 22% to the total tax payments, up four percentage points against 2011.

Private enterprises account for 51.22% of the total 410 new businesses in the V1000 list, versus 31.3% in last year’s ranking.

Top ten corporate taxpayers in the V1000 ranking:

1. Viettel Group

2. Vietnam Mobile Telecom Services Company (VMS)

3. Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank)

4. Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin)

5. Vietnam Oil and Gas Group (PVN)

6. Bank for Investment and Development of Vietnam (BIDV)

7. Vietnam Bank for Agriculture and Rural Development (Agribank)

8. Asia Commercial Joint Stock Bank (ACB)

9. Vietnam Post and Telecommunications Group (VNPT)

10. Vietnam Brewery Limited

VietNamNet/SGT

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