VietNamNet Bridge – Most enterprises operating in Viet Nam were optimistic about the economic recovery, saying business was bouncing back this year, according to the General Statistics Office (GSO).

Goods are unloaded at the Vietsopetro Joint Venture 's service port in Ba Ria-Vung Tau Province. Vietnamese enterprises are gradually stablising production and face fewer difficulties than in previous years.

This was part of the release by the GSO yesterday (June 29) after conducting a survey over business trends in 2014 among 7,675 enterprises across the country.

Director of the GSO's Industrial Statistics Department Pham Dinh Thuy said that Vietnamese enterprises were gradually stablising production and faced fewer difficulties than in previous years.

From January 2013 to March 2014, 5.6 per cent of enterprises stopped operations, 2.8 per cent lower than in 2012.

In the first half of this year, over 37,300 new enterprises were registered with total capital of VND230.9 trillion (US$11 billion). This saw a decrease of 4.1 per cent in number but an increase of 19.3 per cent in capital compared with the same period last year.

According to the survey, over 51 per cent of enterprises said they would maintain the same labour force as last year, over 38 per cent said they would expand, while only ten per cent said they might reduce their workforce.

Over 60 per cent of enterprises said they planned to maintain capital scale while 33 per cent said they planned to increase investments. Only 6.2 per cent revealed they would slash investment.

The correlative percentage of last year was 55.3 per cent, 30.8 per cent and 13.9 per cent.

Other indicators including expected revenue, profits and export value also showed a brighter outlook, Thuy said.

For example, over 71 per cent expected higher revenues than last year and 75 per cent expected higher profits.

However, Thuy said that up to 55.8 per cent of enterprises said they did not know or were unable to assess the demands of foreign markets.

"This proves that Vietnamese enterprises are mainly small and medium-sized, and only a few big enterprises belong to the global production chain," Thuy said.

"As a result, export enterprises are struggling to access the global market," he said.

In March, more than half of the enterprises said that they had not taken out loans, according to the survey. Over 70 per cent said they did not need extra credit, and nearly 30 per cent said procedures to take out bank loans were complicated and time-consuming.

Nearly 19 per cent blamed high interest rates and 14.3 per cent said they did not have the collateral to access loans.

"The percentage is quite high," Thuy said, adding that it might imply that enterprises were cautious about expanding production or the economic recovery was unsustainable.

GSO General Director Nguyen Bich Lam said that many important indicators in the first half of this year reflected the rebound from the bottom of Viet Nam's economy.

Gross domestic production GDP in the first six months increased 5.18 per cent compared with the same period last year, and the consumer price index (CPI) had increased 1.38 per cent compared to last December.

Viet Nam's industrial production is also improving, with estimated growth of 5.8 per cent seen in the first half of this year, higher than last year's 5.3 per cent rise.

Lam said that if there were no major changes to the macroeconomy, Viet Nam could reach growth of 5.8 per cent and hold inflation at 7 per cent as targeted by the National Assembly.

The World Bank estimates the economy will grow 5.4 percent this year, slower than the government target of 5.8 percent, and a seventh straight year of growth below 7 percent.

VNS/VNN