Optimistic Business Prospects

The survey data on business trends of enterprises recently published by the General Statistics Office of Vietnam shows that enterprises are quite optimistic about the business prospects in the last six months of 2022.

Economic recovery continues, and newly established businesses set a record high

According to the Report on the socio-economic situation in the second quarter and first six months of 2022 of the General Statistics Office, the socio-economic performance in the first half of 2022 improved in most industries and areas. Some industries recorded a higher growth rate compared to that of the pre-Covid-19 pandemic period.

Accordingly, the gross domestic product (GDP) in the second quarter of 2022 was estimated to expand by 7.72% over the same period last year, higher than the growth rate of the second quarter of the years in the period 2011-2021. Generally, in the first six months of 2022, GDP increased by 6.42%, higher than the growth rate of 2.04% in the first six months of 2020 and 5.74% in the first six months of 2021.

The agriculture, forestry and fishery sector increased by 2.78%; the industry and construction sector by 7.70%; service sector by 6.60%.

In the first six months of this year, the export turnover reached US$185.94 billion, up 17.3% over the same period in 2021. The import turnover in the first six months was estimated at US$185.23 billion, up 15.5% compared to the same period last year. Processed industrial products contributed 88.7% to the total export revenue.

Another highlight in the first six months is the record in the number of newly registered enterprises. According to the Business Registration Management Agency of the Ministry of Planning and Investment, the number of newly registered businesses reached a record high with 76,233 businesses, up 13.6% over the same period in 2021. The total registered capital of newly established enterprises reached VND882,122 billion, 1.2 times higher than the average in the period 2017-2021 (VND749,019 billion).

Notably, 40,667 enterprises resumed their operation, up 55.6% over the same period in 2021 and 1.9 times higher than the average in the period 2017-2021 (20,949 enterprises).

This has affirmed that although there are many uncertainties in the world economy, the Vietnamese economy still continues its recovery, showing great confidence of businesses in the market.

Optimistic business prospects in the last 6 months

According to business trend survey data published by the General Statistics Office, manufacturers were optimistic about their business prospect in the third quarter of 2022 with 85.0% of them believing that it would be stable and better than in the second quarter of 2022.

Commenting on the business performance in the third quarter of 2022, 49.2% of enterprises assessed that it would be better compared to the second quarter of 2022; 35.8% thought that the business performance would be stable and 15.0% forecast that it would be more difficult.

The survey showed that, in the third quarter of 2022, 49.2% of enterprises in the processing and manufacturing industries assessed that their business performance would be better compared to the second quarter of 2022; 35.8% thought that their business would be stable and 15.0% forecast that they would face more difficulties. In particular, the non-state enterprises sector was the most optimistic with 85.5% of them expecting the production and business situation in the third quarter of 2022 to be better. This rate in foreign-invested enterprises and state-owned enterprises was 84.3% and 82.4%, respectively.

In the third quarter of 2022, 44.9% of businesses expected to have more orders; 13.8% forecast their orders to decrease and 41.3% expected to have stable orders.

According to Mr. Le Trung Hieu, Deputy Director of the General Statistics Office, industrial production has continued to recover, significantly contributing to Vietnam's economic growth in the last six months of 2022. In addition, policies to support production through the Economic Development and Recovery Program will also create momentum for economic development.

Many international organizations also have quite optimistic assessments of Vietnam's economy in 2022. In the June 2022 Global Economic Outlook report, the World Bank (WB) forecast that Vietnam's growth would reach 5.8% in 2022. According to the Asian Development Bank (ADB), the growth of Vietnam's GDP in 2022 is projected at 6.5% as the economy gradually recovers.

These prospects have completely credible grounds not only by the results achieved in the second quarter of 2022 and the first six months of the year, but also by many other positive factors including the labor market recovery, other stimulus measures, increase in imports and exports, tourism reopening, and sustainable remittance inflows.

By Thu Ha, Vietnam Business Forum