VietNamNet Bridge – Though the macro economy has improved, the number of enterprises going bust or being dissolved has continued to increase in the first five months of this year, according to the Ministry of Planning and Investment.

Illustrative image. – File photo

A report by the ministry showed that there had been over 27,900 enterprises halting operations or being dissolved in the Jan-May period, surging by 20.5% from the same period of 2013. In which, over 23,900 firms had stopped operations, up 22.8% year-on-year, and over 3,900 firms had declared bankruptcy, a 7.7% increase.

Meanwhile, over 31,200 new enterprises have been established with total registered capital of nearly VND174 trillion, up a mere 0.7% and 11% year-on-year respectively.

Speaking at a meeting with related ministries in Hanoi on Tuesday, Bui Ha, head of the department of general economic issues under the ministry, said local enterprises were still mired in hardship, resulting in an increase in bankrupt or dissolved firms. In May alone, over 6,700 companies nationwide have stopped operations.

Nguyen Huyen Diu from the monetary policy unit of the central bank said that enterprises were struggling with difficulties in consumption, obstructing them in accessing capital though lending rates have dropped to levels in 2005 and 2006.

Diu said that aggregate demand remained weak and though the central bank had cut lending rates to help businesses access loans, the economy still fails to absorb capital. As a consequence, local banks have strongly purchased government bonds since early this year.

Foreign capital attraction has also tumbled. The nation has seen 500 new foreign direct investment (FDI) projects with total registered capital of nearly US$3.7 billion during the period, down 17% year-on-year.

Meanwhile, there have been 167 projects expanding with a total value of over US$1.8 billion, tumbling by 53.6% against last year.

The newly registered and additional FDI capital has reached over US$5.5 billion during the period, down 34.3% year-on-year.

Ha, meanwhile, said that industrial production had continued improving, with the indicator rising by 5.6% year-on-year. Exports and imports have also increased 15.4% and 9.6% respectively.

Though the nation has still run a trade surplus of around US$1.65 billion, domestic firms have reported a trade deficit of nearly US$5.25 billion in the first five months of this year.

Machine and equipment imports had increased by 22.7%, cloth up 14%, oil and gas up 15.2%, the report said.

SGT/VNN