In first half of year, 53,000 firms went bankrupt
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In the first six months of the year, 53,000 public, private, and foreign-invested businesses declared bankruptcy or began the process, figures from the General Department of Statistics show.
Workers sew garments at a company in Ho Chi Minh City's Go Vap District Photo: Tuoi Tre
That includes as many as 4,100 companies in June alone.
“Nearly 70 percent of the companies said the main cause for their dissolution is business failures,” department deputy head Nguyen Bich Lam said at a meeting Friday to announce the numbers, adding that 28 percent “blamed capital shortage, and 15 percent said they could not sell their products.”
More than 33 percent of those that took out bank loans said they incurred a 19-percent interest rate, while nearly 90 percent said they only could afford rates below 15 percent.
Of the total companies, 23,000 have completed bankruptcy procedures.
Most that have ceased operation were in the non-state sector. Lam said those companies need government assistance because they are the most vulnerable to the economic slowdown.
Department figures also showed particularly high bankruptcy in the provinces of Hai Duong (15.8 percent), Can Tho (19 percent), and Soc Trang (19.4 percent).
Speaking at the same meeting, one official said the consumer price index rose only 6 to 7 percent since last year, proof that efforts to curb inflation were working.
But Nguyen Duc Thang, head of the Price Agency under the General Department of Statistics, added that the slowing acceleration of the index did not indicate deflation.
Similarly, department head Do Thuc said Vietnam hasn’t fall into deflation because the price index only fell below zero for one month in the past year.
“But we have one negative point here, which is the falling demand,” Thuc said. “It will consequently affect production.”
Companies listed six main obstacles to doing business, topped by exorbitant lending rates, as voted by 27 percent of firms. Another 9.7 percent complained of high and unstable inflation, while 7 percent each went to unstable power supplies and inadequate economic management.