The number of dissolved businesses has increased to the highest level in 10 years. Is it worrying?

According to the Macroeconomic report for the first quarter of 2019 recently released by the Vietnam Institute for Economic and Policy Research (VEPR), the number of enterprises temporarily suspending business or dissolving is the highest in the past ten years.

The number of dissolved businesses has increased to the highest level in the past 10 years. (Illustration photo)

Specifically, in the first three months of this year, the whole country had 28,451 newly registered enterprises with a total registered capital of 375.5 trillion VND, a decrease of 6.2% in the number of enterprises and an increase of 34.8% in registered capital compared to the same period in 2018. However, the situation of enterprises temporarily suspending business has caused many concerns.

The first quarter of 2019 saw 14,761 enterprises temporarily suspending operations, 20.8% higher than the previous year and the highest in the past ten years. 58.4% of the 15,331 enterprises waiting to complete dissolution procedures had their business registration certificates revoked under the 2018 review program.

The number of enterprises completing dissolution procedures in the first quarter of 2019 was 4,116, an increase of 23.9% over the same period last year. Enterprises completing dissolution procedures were mainly concentrated in the following fields: wholesale, retail, auto and motorbike repair (accounting for 42.4%), up 32.8% over the same period last year; processing and manufacturing industry (accounting for 10.2%), down 2.8%; construction (accounting for 9.7%), up 23.4%...

According to Dr. Pham The Anh, Head of the Department of Macroeconomics, Hanoi National Economics University, Vietnam's economy is a mixture of dark and bright sides, with many businesses being established and many businesses being dissolved.

In the first quarter, the review of statistics on dissolved enterprises caused this number to increase dramatically, but in reality it is not that large because the number of enterprises temporarily suspending business pending dissolution is already large, Dr. The Anh said.

The results of a recent survey by the General Statistics Office also show that the business trends of enterprises in the processing and manufacturing industry show optimism in the first quarter.

33.7% of surveyed enterprises assessed that the production and business situation in the first quarter was better than the fourth quarter of the previous year, and 40.5% said that the production and business situation was stable. At the same time, 54.6% of enterprises predicted that the business situation in the second quarter would be better than the first quarter, while only 10.6% predicted that it would be more difficult./.