HCMC – The number of HCMC-based businesses facing difficulties and pulling out of the market surged in the first quarter of 2023, according to the HCMC Union of Business Associations (HUBA).
Over 11,300 companies ceased operations from January to March, up 20.1% over the same period in 2022.
Of more than 520,000 enterprises active in the city, 83% are grappling with difficulties due to unfavorable market conditions, difficulties in fund-raising, and rising inventories and raw material prices, showed data from the association.
It projected that business conditions would remain bleak during the year’s second quarter, with export revenues of various industries slumping over the same period in 2022 and low demand in the global market.
Businesses said in a letter to the HCMC government that the situation had not improved despite their efforts to cope with poor market conditions.
Exchange rate volatility and a plunge in new orders have adversely affected apparel firms’ imports of raw materials, leading to a drop in profit during the first quarter of the year, while food manufacturers said they found it tough to take out loans with a reasonable interest rate.
They proposed the city’s government continue applying an added value tax rate of 8% to businesses operating in all economic sectors until the year’s end and refund taxes promptly.