Covid-19 troubles push over 100,000 businesses to suspend operations

The Covid-19 pandemic’s severe impacts have seen as many as 101,700 businesses in Vietnam close up shop in 2020, up 13.9 percent year-on-year.

Of these 46,600 have registered to temporarily suspend operations, while 37,700 are waiting to complete dissolution procedures, according to a new report by the General Statistics Office. The report also says that 17,500 enterprises completed their dissolution procedures this year.

The surge in business suspensions has been attributed to the adverse impacts of Covid-19, which has cripped key sectors and seriously affected socio-economic activities worldwide.

The number of newly-established enterprises in Vietnam this year fell 2.3 percent year-on-year to 134,900 with a combined registered capital of VND2,200 trillion ($94.31 billion), up 29 percent.

If the VND3,300 trillion in additionally registered capital for 39,500 companies is included, the total registered capital added to the economy this year is more than VND5,500 trillion, an increase of 39.3 percent year-on-year.

The GSO report says a survey on business sentiment in the manufacturing and processing sectors in the fourth quarter of 2020 found 40.6 percent of enterprises experiencing improvement in business performance over the previous quarter, while 24.7 percent faced difficulties and 34.7 percent said their business remained stable.

Almost 43 percent of companies expect things to get better in the first quarter of 2021, while 19 percent foresee more difficulties and 38.2 percent believe the situation will be stable.

Vietnam’s economic growth slowed to 2.91 percent this year, its lowest level in a decade, given the negative impacts of Covid-19, natural disasters and a sluggish global economy. However, it was one of the few economies in the world to record positive growth, most others experiencing contractions.