Most businesses battle to endure through 2023: survey

By Duc Minh   January 15, 2024 | 11:16 pm PT
Approximately 70% of businesses viewed the economy as “negative” or “very negative” in the past year, despite government support initiatives.

The negativity outlook was strongest among businesses in Ho Chi Minh City, according to a survey which polled 2,700 businesses in December by the Private Sector Development Committee in collaboration with VnExpress.

Around 73% of businesses planned to scale down or suspend their operation this year.

Of those that would continue to operate, almost 60% said they would scale down their labor force by 5% or more. More than 15% of businesses would cut their staff size by half.

Over 60% anticipated a decline in revenues, with the main difficulties being a shortage of orders and cashflow, obstacles in completing administrative procedures, and accessing loans.

Many businesses are exhausted in the post-pandemic era, followed by two years of global economic uncertainties, the committee said.

But compared to a previous survey last April, businesses’ outlook had improved in all areas.

The ratio of businesses having a positive outlook on the economy surged 2.7 times, and the number of companies planning to scale up their business doubled.

The Private Sector Development Committee said that the government’s supporting policies had contributed to the outlook improvement.

A VAT reduction of 2% and incentives in corporate income tax and land rents have helped businesses. The government also offered loans with incentive interest of 2 percentage points lower than the market.

The committee expects a stronger incentive policy this year, which it considers a key year for recovery.

It proposed reducing corporate income tax from 20% to 18% and eventually 15%. It also wants more incentive interest loans being disbursed. Administrative procedures should be simplified.

"This is the golden time to reform and thoroughly solve the internal problems of the economy to create new driving forces," the committee added.

More investment is needed in green technology and semiconductors, and the government should prioritize the development of infrastructure and high-quality employees for this purpose, it said.

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