Vietnam industrial hub sees businesses struggle

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Less than a third of the companies based in Ho Chi Minh City, Vietnam's industrial hub, reported profits in both the first and second quarters.

Of over 112,480 firms, only 31 percent made profits last quarter and 28 percent in the previous one.

But despite the better showing, cumulative losses in the second quarter were 22 percent higher at VND27.8 trillion (US$1.31 billion).

Deputy Minister of Finance Do Hoang Anh Tuan revealed the figures at a meeting in HCMC last week to review the country's socioeconomic growth since 2011.

The economy was hit by double-digit inflation in 2011 and grew at the slowest pace in 13 years last year.

News website Saigon Times quoted Tuan as saying the ratio of profitable firms would often be 51 percent or more during good times.

Analysts warn the city faces a challenge in achieving its economic growth target of 12 percent on average through 2015. It has been 9.5 percent in the last two years.

Tax revenues are down, with officials expecting to collect no more than VND216.95 trillion this year, 9 percent short of the target.

Nguyen Thi Hong, vice chairwoman of the city People's Committee, called for lowering the target, calling it "too high" given the current economic situation.

The target set by the central government is nearly 21 percent higher than last year.

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