Sunday,  Sep 23, 2018,06:09 (GMT+7) 0 0
More enterprises shuttered in first half of 2018
By Thuy Dung
Thursday,  Jul 12, 2018,16:19 (GMT+7)

More enterprises shuttered in first half of 2018

By Thuy Dung

HANOI – Despite the high economic growth, the number of businesses shutting down across the country in the first half of 2018 was higher than expected, leading to a slump in job creation compared with the same period last year, experts said.

A macroeconomic report on the second quarter of this year, released yesterday by the Vietnam Institute for Economic and Policy Research (VEPR), shows that the total number of newly established enterprises in the first half of 2018 went up by a mild 5.3% year-on-year, amounting to some 65,000 enterprises.

The combined registered capital of the firms amounted to some VND650 trillion, up by 8.9% year-on-year, while the average registered capital of each firm reached VND10.1 billion, rising by 3.4% against the same period last year.

Meanwhile, the second quarter witnessed a surge in the number of enterprises going out of business by 75.7% to 31,668 firms against 18,039 enterprises in the same period last year. As many as 52,803 firms shut down in the first half of 2018, soaring by a whopping 34.7% year-on-year.

Similar to the first quarter, the scale of new jobs in the second quarter continued to dwindle, with an additional 283,000 new jobs created, 15.7% lower than the second quarter of 2017.

That the number of new jobs fell while the country’s economy was on the rise raised questions about the quality of the economic growth, according to the report.

The labor growth in the foreign direct investment (FDI) sector in the first six months of 2018 amounted to 3.5%, a significant reduction against the same period in previous years (8.9% in 2016 and 6.6% in 2017), while labor forces in private enterprises bounced back by 3.5% after a 0.5% fall last year.

Thus, private enterprises are gradually regaining their importance in terms of job creation, while the FDI sector has witnessed high automation levels, resulting in minimal use of human resources.

VEPR Director Nguyen Duc Thanh noted that this situation highlighted the weakness of the Vietnamese economy in the first half of the year.

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