The Private Economic Development Research Board (Board IV of the Prime Minister’s Advisory Council on Administrative Procedure Reform) recently conducted a survey among businesses, revealing that compared to surveys conducted in April 2023 and December 2023, this round of indicators shows a more positive outlook.

Specifically, the percentage of businesses evaluating the macroeconomic situation as “very positive” has increased nearly fivefold compared to April 2023 (3.3% vs. 0.7%), while the proportion rating it as “positive” is more than seven times higher (12.8% vs. 1.8%). Meanwhile, the percentage of businesses rating the situation as “very negative” is nearly half of that recorded previously (19.4% vs. 44%).

This indicates that following the COVID-19 pandemic and the challenges of the 2022 economic context, business confidence has gradually returned and improved with each survey round.

This trend aligns with data from other macro reports. In the first nine months of 2024, over 183,000 new businesses have registered or re-entered the market, surpassing the total number for the entire year from 2018 to 2021. On average, more than 20,300 businesses are being established each month, significantly exceeding previous years.

The number of businesses entering or re-entering the market each month since 2022 has seen a substantial increase compared to previous years, reflecting greater confidence within the private sector regarding an increasingly stable business environment. The rising number of businesses entering the market clearly signals a recovery in the economy.

Statistics on newly established and re-entering businesses indicate a resurgence in the private sector following the COVID-19 downturn in 2021.

This resurgence is also reflected in Vietnam’s import and export figures for the third quarter of 2024, which have significantly increased. Specifically, the export turnover reached $108.6 billion, up 15.8% year-on-year and 10.6% compared to Q2. Imports totaled $99.74 billion, rising 17.2% year-on-year and 6.1% from the previous quarter, resulting in a trade surplus of $8.8 billion for the quarter.

For the first nine months of 2024, total import and export turnover reached $578.5 billion, a 16.3% increase compared to the same period last year, with a trade surplus of $20.8 billion - an impressive figure during the 2020-2024 period.

This demonstrates a strong recovery and an improving competitive capacity for Vietnamese goods in the international market.

Notably, shipments of mobile phones, computers, and electronic products have increasingly contributed to overall export growth. In Q3, three product categories exceeded $10 billion, primarily in electronics: computers, electronic products, and components reached $19 billion, a 19.2% increase year-on-year; mobile phones and components achieved $14.7 billion, a 14.7% rise; while machinery, equipment, tools, and spare parts totaled $14.6 billion, also up 14.7% compared to the same period last year.

This notable growth in the electronics sector not only reflects global consumer preference for high-tech products but also reinforces Vietnam's increasingly important position in the global supply chain. With this growth trajectory, exports of computers, electronic products, and components are expected to continue leading in the coming years.

Weakening reform momentum

However, the number of businesses exiting the market remains high and has been continuously increasing since 2020. In the first nine months of 2024, the total number of businesses withdrawing from the market approached the total for the entire year of 2023, surpassing all previous years since 2018, with a figure of 163.76 thousand.

On average, 18,200 businesses exit the market each month. Compared to the same period last year, the number of businesses leaving the market in the first three quarters of 2024 has increased by 21.2%. Among these, the number of businesses suspending operations reached 86.9 thousand, a 14.6% increase year-on-year, nearing the record high of 89 thousand in 2023.

Moreover, the ratio of businesses exiting the market compared to those entering or re-entering in the first three quarters of 2024 stands at 89.7%, higher than the 79.3% recorded in 2023.

The increasing trend of businesses suspending operations suggests that they are choosing to step back and assess the situation, waiting for opportunities to pursue suitable business prospects. These businesses predominantly belong to the small and medium-sized category, typically with capital below 10 billion VND and established for less than five years.

The rapid increase in the number of businesses exiting the market reflects the common challenges faced by businesses in the post-COVID-19 business environment and the unstable global economic and political situation, particularly for small and medium-sized enterprises.

These difficulties have placed significant pressure on businesses, making them more sensitive to fluctuations and gradually diminishing their resilience and recovery capabilities.

The business environment still harbors many risks, with barriers regarding business conditions and administrative procedures not only remaining but also trending upwards, as reform momentum from ministries and sectors weakens.

According to the Ministry of Planning and Investment, there appears to be minimal effort or initiatives at the local level to support and promote business development. This situation has also been somewhat reflected in the perceptions of businesses according to the Provincial Competitiveness Index (PCI) survey by VCCI.

Therefore, it is crucial to enhance research and identify the obstacles and challenges faced by businesses regarding legal regulations and implementation, including those regarding policies and procedures, to urgently amend or propose revisions to relevant legal documents; while also providing guidance and oversight on implementation.

During the drafting and finalization of regulatory documents, broad consultations should be organized with affected parties to ensure clear, transparent, and public explanations of the feedback received.

Lan Anh