Covid-19 slump forces nearly 30,000 businesses to suspend operations

By Hoang Phong June 29, 2020 | 05:36 pm PT

A worker manufactures face masks at a factory in Hanoi. Photo by VnExpress/Ngoc Thanh.

As many as 29,200 businesses in Vietnam registered to temporarily suspend operations in H1, up 38.2 percent year-on-year, according to General Statistics Office.

At 19,600, there was a 10.2 percent year-on-year reduction in the number of businesses waiting to complete dissolution procedures, the GSO says.

Meanwhile, 7,400 companies completed their dissolution procedures, down 5 percent over the same period last year.

Two months after the end of a social distancing campaign in Vietnam, economic activities have gradually returned to normal, with June seeing 13,700 new businesses established, a 27.9 percent month-on-month surge.

The number of newly established enterprises in Vietnam in the first six months of this year, however, fell 7.3 percent year-on-year to 62,000 with a combined registered capital of VND697.1 trillion ($30.07 billion), down 19 percent.

The GSO says a survey on business sentiment in the manufacturing and processing sectors in the second quarter of 2020 found 27.3 percent of enterprises experiencing improvements in business performance compared to the previous quarter while 40.8 percent faced difficulties and 31.9 percent said their business remained stable.

For the third quarter of 2020, 49.1 percent of the surveyed enterprises expressed positive outlook compared to the second quarter, while 19.4 percent expected difficulties and 31.5 percent saw stability.

There are about 760,000 businesses operating in the country and the nation had targeted taking this up to a million this year.

Vietnam's GDP grew by just 1.81 percent in the first half, the lowest since 2011.