Vietnam's business community became more pessimistic in the third quarter as economic uncertainty and financial instability hurt sentiment around the world, Grant Thornton said in a new report.
Optimism for the country's economic outlook saw a second successive fall, moving from 54 percent to 38 percent, the report said.
The research company said in the first quarter the government took some strong decisions in the management controls of monetary and financial policy, especially to reduce interest rates and increase credit growth.
"Whilst these are beginning to have an effect, it is the first time in my 20 plus years here that I have seen so many Vietnamese business owners pessimistic about the future," said Ken Atkinson, Managing Partner of Grant Thornton Vietnam.
Businesses generally are suffering from the burden of high borrowing costs and shortage of working capital, he added.
According to Grant Thornton, 14 percent of respondents in Vietnam expect a decrease in profits.
"Currently, the problems Vietnam needs to continue to address are inflation and interest rates," said Atkinson. "The stock market is still gloomy, partly reflecting the views of many people and businesses, showing the loss of faith in economic growth this year and even into 2012."
Bill Hutchison, advisory services partner, said Europe, one of the major markets for Vietnam, is facing faces a double set of problems arising from a slowdown in economic activity and a debt crisis.
"This could have a significant negative impact on Vietnam, especially at a time of reduced domestic confidence and retail spending," he said.
On the global level, business optimism collapsed from 31 percent to just 3 percent, Grant Thorton said, adding that the optimism of business owners in mature markets like the EU and North America has been hit particularly hard.
"These figures are the worst since 2009, when we were in the midst of the global recession," said Ed Nusbaum, CEO of Grant Thornton International. The worrying thing is that negative sentiment about the wider economy is now damaging business growth prospects.