The Saigon Times Weekly
Businesses in difficult times
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. 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.
A large number of businesses have been facing formidable challenges, such as dwindling cash flow, higher capital costs and difficult access to bank loans. Multiple large companies have been forced to sell off most of their assets at a low price, with foreign businesses being their buyers. Some were acquired and merged into others.
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, with 30% being real estate bonds.
To improve the situation, 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.