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Many Businesses pessimistic about 2013 economic prospectsVietnamese businesses have expressed pessimism about next year’s economy, anticipating numerous difficulties and challenges requiring greater efforts to overcome.

The Vietnam Report Joint Stock Company (Vietnam Report) recently conducted a survey of 192 businesses numbering among Vietnam’s top 1,000 largest corporate income tax payers (V1000), top 500 largest enterprises by revenue (VNR 500), and the 500 enterprises with the fastest growth (FAST 500).

The survey focused on business performance and opinions of 2013’s economic prospects.

Half of V100 business leaders said that their business operations were worse than in 2011. Only 19 percent said their business performance had improved in 2012.

It is worth noting that all representatives from the banking and financial sectors reported 2012’s results were much lower than a year earlier. 60 percent of iron, steel, and construction businesses shared the same disappointment.

Next year’s gloomy economic outlook means no end in sight to the difficulties confronting domestic businesses.

Up to 55 percent of businesses argued that the national economy will see little or no improvements in 2013.

The numbers of businesses (25 percent) suggesting next year’s business situation will be worse than last year is higher than those (20 percent) stating that next year could be better.

From the majority of surveyed business representatives believe the national economy is likely to bounce back after 2013.

2012’s economic woes forced more than 65 percent of employers to reduce unnecessary costs in an effort to maximize profits while 45.8 percent of enterprises expanded the scale of their business and 27 percent limited bank loans.

Businesses also highlighted challenges they perceive on 2013’s horizon, such as businesses environment instability, declining consumer demand, material price rises, and capital resource inaccessibility.

However, they also maintained faith in the Government’s commitment to keeping 2013’s rate of inflation at a single digit. Only 19 percent of business representatives stated next year may see double-digit inflation.

Many businesses said they hope to receive more support from banks next year. Up to 76 percent of businesses plan to borrow capital from banks to boost production in 2013. But half of businesses said the majority of their resources will come from equity capital.

The survey showed to the necessity of business restructuring to advance their development. More than 90 percent of business managers said Vietnamese businesses have restructured independently and the trend will continue in following years.

The Government needs to maintain a stable business environment, especially in terms of interest and inflation rates, to assist businesses with accessing capital.

(VOV)

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