New business capital lowest in four years

By Duc Minh   May 29, 2023 | 03:53 am PT
The registered capital of new businesses in the first five months was 15% lower than in the same period in 2019 VND568.70 trillion ($24.23 billion), showing the impact of economic challenges on companies.

It fell 25% year-on-year, according to the General Statistics Office.

The capital was registered by a total of 61,900 companies, down 1.6% year-on-year.

On average, each company registered a capital of VND9.2 billion, the lowest since 2017.

Together with changes in capital of existing businesses, a total of VND824.90 trillion was registered, down 43% year-on-year.

Nearly 33,000 companies resumed operation in the period, down 7.4%, while 55,200 businesses suspended their operations, up 20.3% year-on-year.

About 22,500 companies were waiting to be dissolved, up 34.1% year-on-year.

On average each month, 17,600 companies were suspended temporarily or shut down their operations, mostly in the property, logistics and manufacturing sectors.

The lack of access to low-interest credit has been reported by many businesses as the main challenges they face this year.

By the end of March the average loan interest rate of 35 commercial banks was at 10.23%, 0.56 percentage points higher than at the end of December.

The stock market plinges since last year and problems with the bond market also brought about many difficulties, while global inflation and other financial concerns also had a major impactmon Vietnam.

Over 82% of businesses plan to scale or shut down in the remaining months of this year, according to a survey of 9,560 business executives at the end of April by the government's Private Sector Development Committee and VnExpress.

Some 71% want to reduce their workforce by more than 5%, with 22% seeking to cut it by half, and 81% have a negative outlook on the economy this year.

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