BUSINESSES OPTIMISTIC ABOUT PROSPECTS IN QUARTER 4

According to a latest report by the General Statistics Office (GOS), the FDI sector is the most optimistic about business prospects, with 82.8% of respondents forecasting better business performances in the fourth quarter of 2020 than in the third quarter. The same responses by State-owned enterprises and privately held companies are 81.7% and 80.2%, respectively.

The GSO report on socioeconomic performance in the first nine months of 2020 released on September 29 showed that Vietnam witnessed 99,000 companies registering to invest more than VND1,400 trillion and employ 777,000 workers from January to September. The new figures represented a 3.2 decline in corporate establishments and a 16.3% decline in employment, but a 10.7% increase in registered capital.

New companies average registered capital of VND14.4 billion, up 14.4% higher than a year ago. While VND2,173.4 trillion was added by 29,500 existing companies, the total registered capital injected into the economy was VND3,601.9 trillion in the first nine months of this year, 19.2% higher than the same period of last year

In addition, 34,600 enterprises resumed operations, up 25.5% more than in the first nine months of 2019, raising the total newly activated enterprises to 133,600, up 2.9% year on year. On average, each month, 14,800 companies were established or resumed operations.

A survey on business trends in the manufacturing industry in the third quarter of 2020 showed that 32.2% of respondents anticipated better business performance in the third quarter of 2020 than the second quarter, 31.9% saw more difficulty and 35.9% rated their business stable.

Meanwhile, 45.6% anticipated better fourth-quarter business performance than in the third quarter; 19% forecast more difficulty and 35.4% believed business performance would be stable. Specifically, the foreign direct investment (FDI) sector was most optimistic, with 82.8% forecasting a better outlook. The same responces by SOEs and private companies were 81.7% and 80.2%, respectively.

According to the GSO, boosted by world and Vietnamese economic recovery trends, under the close direction of the government in all fields, especially in public investment, and with flexible actions by enterprises, the economic performance in the fourth quarter will be much better than in the third quarter. The country’s GDP was forecast to grow 2-3% this year, similar to the positive projection by international organizations on Vietnam’s post-epidemic economic recovery. Previously, the Asian Development Bank’s 2020 Asian Development Outlook Report also predicted that Vietnam's economic growth might reach 1.8% in 2020 amid the COVID-19 pandemic and 6.3% in 2021.

Specifically, GSO General Director Nguyen Thi Huong said, signs of recovery are clear. For example, third-quarter GDP growth was estimated at 2.62%, higher than 0.39% in the second quarter. Economic sectors also saw a bright prospect in the third quarter. The agriculture, industry and service sectors reported respective growth of 2.93%, 2.95% and 2.75%. Business establishments increased 2.9% year on year in the first nine months.

Regarding public investment, determined to disburse all remaining capital at central and local levels as planned, Prime Minister Nguyen Xuan Phuc, at his all meetings, requested central and local ministries to follow closely and take consistent solutions as per the Resolution of the National Assembly and the Resolutions of the Government; promptly remove barriers, difficulties and obstacles, and clear up bottlenecks to speed up the investment capital disbursement progress. A large amount of public investment capital to be disbursed in the fourth quarter of 2020 is one solution to spur economic growth.

In addition, free trade agreements (FTAs), especially the EU - Vietnam Free Trade Agreement (EVFTA), will help boost Vietnam’s exports to EU countries - a large traditional market of Vietnam. In addition, other export and consumption measures are also launched.

However, according to the GSO, to achieve the growth goals, in the coming time, the Government should carry out large and effective support packages to revive business performance and economic recovery, focusing on enterprises, reforming and streamline processes and procedures for timely and easy access to support policies. Active and flexible monetary policies are harmoniously coordinated with other macroeconomic policies to control inflation, strengthen macroeconomic stability, expand monetary markets, foreign exchange, and economic recovery.

Besides, there should also be specific measures to support enterprises to improve their competitiveness and expand the market.

Source: VCCI


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