More companies halt production, survival chances low: report

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Only 20 percent of companies in Ho Chi Minh City are capable of surviving difficult economic conditions, a new report says.

It says around 3,000 companies have already halted operations during the first two months of 2012.

The report, prepared by the HCMC Entrepreneurs Association, says many businesses are struggling with rising production costs and low sales.

It says 60 percent of small and medium-sized enterprises in the city cannot find enough funds to keep going, calling for urgent support from the government.

Do Thi Loan, vice chairwoman of the HCMC Real Estate Association, said with interest rates staying high around 22-23 percent, it was very difficult for businesses to take out loans. A recent cut of one percentage point in the maximum deposit rate may not help much in bringing lending rates down, she said.

More than 7,600 Vietnamese companies shut down last year, news website VnExpress reported Wednesday, citing the Vietnam Chamber of Commerce and Industry.

There were 622,977 licensed companies in Vietnam at the end of last year, but 12.6 percent of them have closed, the report said.

Vietnam's economic growth eased to 5.9 percent last year from 6.8 percent in 2010. The government is targeting a growth of 6 percent for 2012.

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