Covid-19 leaves mark on Vietnamese enterprises

Vietnam’s economy is facing serious impacts from the Covid-19 pandemic, with many businesses forced to curb operations or even close down.

There were only 81,600 newly-registered enterprises in the first eight months of this year, while 85,500 exited the market, including 43,200 that temporarily suspended operations. The index of industrial production (IIP) fell 4.2 per cent in August compared to July and 7.4 per cent against August 2020.

According to the Ministry of Planning and Investment (MPI), the difficulties businesses are facing include a sharp decline in aggregate demand, affecting orders, contracts, and output; sharply falling revenue; production, consumption, and export supply chains being disrupted; and cash flow issues. The introduction of social distancing has not only hit production but also seriously affected distribution.

World Bank economists have said that Vietnam needs to continue to implement loose monetary policies, speed up the implementation of public investment projects, and expand support to businesses and workers. According to Mr. Bui Tuan Minh, Deputy General Director of Deloitte Private in Vietnam, though a rising number of businesses left the market in the first eight months, there were still 81,600 new businesses established. This shows that some businesses see opportunities amid Covid-19 and the focus needs to be on efforts to restore production.

The Vietnamese Government has also adopted measures to overcome the difficulties, such as abolishing regulations that restrain transportation and facilitating investment, production, and business activities. Measures to promote the disbursement of public investment capital are being widely implemented, as is a nationwide vaccination campaign.