VietNamNet Bridge – Experts have voiced concerns over the health of enterprises, saying the ever-increasing number of business shutdowns cast a gloomy outlook on the economy.

Data from the Business Registration Management Department under the Ministry of Planning and Investment show over 60,700 enterprises have either disbanded or closed business operations this year, a year-on-year increase of 11.9%.

Of the total number, over 9,800 firms have completed dissolution procedures, a rise of 4.9% from a year ago, while over 10,800 enterprises have registered their temporary shutdowns, an increase of 35.7%. In addition, as many as 40,000-plus enterprises have stopped operation without notice.

In another angle, nearly 77,000 new business start-ups have been recorded this year, up 10.1%, but their total registered capital is VND398 trillion, a fall of 14.7%.

Nguyen Bich Lam, head of the General Statistics Office, said the average capital of each new enterprise has slid from VND6.68 billion in 2012 to VND5.18 billion this year, and if the price change is factored in with the 2012 price as the base, then the average capital for each new enterprise is only VND4.18 billion.

“In general, enterprises are encountering a host of difficulties,” Lam said.

Tran Dinh Thien, head of the Vietnam Economics Institute, said the number of business closures at over 60,000 posed big concerns.

“The trend continues, with over 60,000 enterprises going bust. They had weathered tough business conditions in the past couple of years, but now they could not survive,” Thien said.

The pace of business shutdown is quite grim and cannot be offset by the number of new start-ups which have just registered for business but have yet to engage in business or production at all, Thien noted.

The economist added that over 100,000 enterprises have closed or become inactive in the past two years, and “in my opinions, these 100,000 enterprises have a combined capacity equivalent to 30% of operational businesses now.”

Official figures show up to 54,000 enterprises were closed down in 2012 and over 79,000 in the previous year.

The Ministry of Finance, meanwhile, reported that up to two-thirds of operational enterprises have reported losses.

Source: SGT