Vietnam firms hopeful of better year despite demand slump: study

TN News

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The business outlook is brighter this year though profits will still come under pressure due to the continuing slump in demand, analysts have said.

News website Saigon Times quoted Pham Thi Thu Hang, general director of the Vietnam Chamber of Commerce and Industry, as saying at a conference to discuss support for businesses January 7 that companies are hopeful the business environment would improve this year.

They expect strong growth in sales, she added.

A recent study by her organization found that over 42 percent of 700 firms polled plan to expand operations this year.

That compared with 6.7 percent and less than 1 percent who said they would scale down and temporarily shut down their business.

Businesses forecast increases in new orders and employment, according to the study.

Hang said profits and local demand are still businesses' biggest concerns.

HSBC said in a report January 2 that Vietnamese businesses would greatly benefit from recovering demand in the US and the EU this year while domestic demand would stay lackluster.

Vo Tri Thanh, deputy head of the Central Institute for Economic Management, was also pessimistic about local demand.

He said firms should target the two western markets along with China.

Nguyen Truong Son, vice chairman of the Vietnam Young Entrepreneur Association, agreed, saying Vietnam's exports to China would have an opportunity to grow strongly after the formation of the Kunming (China)-Hanoi-Hai Phong economic corridor, one of several linking countries in the Greater Mekong Subregion.

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