In May alone, the country recorded more than 12,000 new enterprises, with a registered capital of VND103.7 trillion, a decrease of 24.2 per cent in the number of firms and a 32.9 per cent drop in registered capital, as per the General Statistics Office (GSO).

Almost 6,000 enterprises returned to operation during this period, marking a 14.3 per cent YoY increase, although this was a 38.1 per cent decrease compared to the previous month.

The first five months saw the average registered capital for a new enterprise at VND9.2 billion, marking a 24.1 per cent decline YoY. The GSO noted a continued drop in newly established firms and those resuming operations, with an increase in businesses temporarily suspending their operations or awaiting dissolution.

The first five months of the year witnessed the lowest new business capital in four years. The registered capital of new businesses fell 25 per cent YoY, and 15 per cent lower than the same period in 2019, showing the economic challenges companies are currently facing.

Including changes in the capital of existing businesses, a total of VND824.90 trillion was registered, reflecting a 43 per cent YoY decrease. The logistics, manufacturing, and property sectors saw the majority of suspensions, with an average of 17,600 companies suspending or ceasing their operations each month.

Many businesses cited the lack of access to low-interest credit as a significant challenge faced this year. The average loan interest rate from 35 commercial banks was at 10.23 per cent by the end of March, a 0.56 percentage point increase since December.

Ongoing global inflation, stock market plunges, and issues within the bond market have also significantly impacted Vietnam’s business landscape, according to GSO data.

A survey by the government’s Private Sector Development Committee and VnExpress revealed that over 82 per cent of businesses plan to scale down or cease operations in the remaining months of the year. A significant 71 per cent of businesses aim to reduce their workforce by more than 5 per cent, and 81 per cent have a negative outlook on the economy this year.

Fibre2Fashion News Desk (NB)