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Thursday, June 20, 2024

Around 77,000 firms exit market in Jan-Apr

The Saigon Times

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HCMC – The Government has sent a report on the nation’s socio-economic performance to the National Assembly, emphasizing that around 77,000 businesses have pulled out of the market in the first four months of the year, surging 25% year-on-year.

Nearly 78,900 enterprises came into existence or returned to business in the January-April period, down 2% year-on-year.

The Government stated that during the four-month period, the index of industrial production (IIP) declined by 1.8% year-on-year. Many businesses in key manufacturing and export industries, such as seafood processing, leather and footwear, iron and steel, cement and construction materials, have experienced a sharp decrease in orders and a surge in inventory.

Many businesses have been facing formidable challenges, such as dwindling cash flow, higher capital costs and difficult access to bank loans.

In addition, numerous firms, especially those in the real estate sector, have come under pressure over the maturity of the corporate bonds they issued.

The total value of corporate bonds that will fall due this year is VND284,000 billion, with real estate accounting for 40%. Meanwhile, bonds worth around VND363,000 billion will fall due next year.

Many large companies were forced to sell off most of their assets at a price only half of their actual value, with foreign businesses being their buyers. Some were acquired and merged into others.

Hundreds of thousands of workers in industrial zones saw their working hours cut or were left unemployed.

The Government will continue to navigate monetary policy and assist businesses in reducing input costs, boosting production and attracting investment, as well as allocate funds for public investments and execute programs for economic recovery and development.

Moreover, local banks will lower their interest rates, stabilize lending rates, and create favorable conditions for businesses and individuals to access credit loans.

The local authorities will strive to simplify legal procedures and improve the investment environment.

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